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In the software and programming complex, insiders have bought a decent amount of stock in
Ebix(EBIX - Get Report), an international supplier of software and e-commerce solutions to the insurance industry. This is yet another name whose insiders are doing some buying after a big decline. This stock is off by just 10% so far in 2011, so insiders are buying into a modest amount of weakness.
Ebix has a market cap of $761.97 million and an enterprise value of $713.64 million. This stock trades at a cheap valuation, with a trailing price-to-earnings of 12.14 and a forward price-to-earnings of 12.55. Its estimated growth rate for this year is 13.2%, and for next year it's pegged at -2.3%. This is not a cash-rich company; the total cash position on its balance sheet is $15.60 million, and its total debt is $27.23 million.
A director just
bought 24,500 shares, or $494,900 worth of stock, at $20.20 per share.
From a technical standpoint, EBIX is currently trading above both its 50-day and 200-day moving averages, which is bullish. This stock hit a recent low in October at $12.99 a share, and since then it has soared and uptrended strong to its current price of over $21 a share. During that uptrend, shares of EBIX have been consistently making higher lows and higher highs, which is bullish price action. The stock is now setting up for a big breakout if it can manage to clear some near-term overhead resistance.
If you're bullish on EBIX, you can look to be a buyer once the stock takes out $21.89 a share on high-volume. Look for volume on any move above that level that registers near or above its three-month average of 467,158 shares. A high-volume move above that level should setup EBIX to trade back towards $25 a share, or possibly even higher. Use a mental stop a few percentage points below the breakout point if we see that move in the near future.
To see more stocks with notable insider buying, including
Primo Water(PRMW) and
Inergy(NRGY), check out the
Stocks With Big Insider Buying portfolio on Stockpickr.
-- Written by Roberto Pedone in Winderemere, Fla.