Since the beginning of the year, Websidestory Inc. (WSSI) has halved from $20 in February to its current level of around $10. The most recent sell-off was due to a recent 10Q filing with the SEC on the 8th in which the company announced lower than expected results for the quarter due to a continuing increase in expenses. This was followed by a downgrade by JMP Securities, which dropped the stock even further to its current levels.

So, why should you care? Well, Websidestory filed a series of Form 4s yesterday, just as the stock is hitting its 52-week low at around $10. Director William Harris disclosed that he bought just over 199,000 shares on August 8th at $9.85 to $10.14 per share. This brings his stake to almost 207,000 shares. Director Douglas Lindroth and Chairman Jeffrey Lundsford also disclosed purchases of 5,000 and 10,000 shares, respectively. Investors are betting that this insider buying is an indicator that the company is poised for a turnaround after a devastating year.

To add to this bit of optimism, an analyst for ThinkEquity, one of the better research firms around, called the investors’ sell-off “irrational” stating that “the market largely ignored management’s focus on building out a stronger business … We were disappointed by the earnings miss and margin compression, but were also equally encouraged by record booking activity, revenue outperformance, customer wins, and raised revenue guidance, all important indicators of a company prospect”. Canaccord Adams analysts agreed with this sentiment stating that the sell-off represents “a buying opportunity for investors” citing recent acquisitions which have enabled the company to better compete in the digital marketing sector.

So, is Websidestory Inc. a buy at these levels? Insider buying and analyst opinion indicate a resounding “yes”; however, it is difficult to say how long it will take management to implement its strategies and curb its expenses. The stock is definitely worth keeping an eye on as future filings paint a clearer picture of any turnaround efforts.