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Looking at Lantronix, Inc.'s (NASDAQ:LTRX ) insider transactions over the last year, we can see that insiders were net buyers. That is, there were more number of shares purchased by insiders than there were sold.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
View our latest analysis for Lantronix
The Last 12 Months Of Insider Transactions At Lantronix
In fact, the recent purchase by Philip Brace was the biggest purchase of Lantronix shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was higher than US$4.92 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. The only individual insider to buy over the last year was Philip Brace.
You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
Lantronix is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insider Ownership Of Lantronix
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 4.2% of Lantronix shares, worth about US$8.1m, according to our data. We do generally prefer see higher levels of insider ownership.
So What Do The Lantronix Insider Transactions Indicate?
It's certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Lantronix insiders are expecting a bright future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 2 warning signs with Lantronix and understanding these should be part of your investment process.