This Zix Corp Board Member Bought Shares at $4.50 a Piece, Should You?

Zix Corp board member: E. Michael Dailey, Director at Zix Corporation (NASDAQ:ZIXI)’s Board, acquired last Tuesday, Oct. 8^th, 1,000 shares from the company. He paid $4.50 per share, totaling $4,500. After the reported transaction, he owns 10,000 shares of common stock, valued at $45,100.

Dailey started a position in the company 6 months ago, and has been purchasing stock every month ever since. However, he is not the only insider betting on Zix Corp. L Maribess Miller, also a Board Director, bought 4,000 shares this year; and J Mark Bonney, an extra 5,000. All of them bought in the company this year.

On the other hand, Richard Spurr, Chairman and CEO, sold more than 300,000 shares this year. Similar is F James Brashear‘s (Vice President of the General Counsil) case, who got rid of approximately 40,000 shares. Finally, W Michael English, CFO, sold about 5,000 extra shares during 2013.

Zix Corporation has been quite commented on lately, mainly because it has been one of the most shorted stocks of the Russell 3000 over the last few months. However, what was interesting was that some of the insiders previously mentioned were taking the other side of the trade, buying stock from short traders.

Back to Dailey, his acquisition seems to be a bet on this quarter’s performance. Financial results will be announced on Oct.22^nd, and the purchase might be anticipating this. The purchase also follows some price target raises, like the one made by Imperial Capital, which lifted its target price from $5,50 to $6,00. Considering that the stock now trades at $4.51, the upside potential is substantial.  In addition, its valuation at 32.7 times its earnings, at a 28% discount to its industry’s average, makes it an even more attractive purchase.

Disclosure: Javier Hasse holds no position in any stocks mentioned

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