As LiveOne, Inc. (NASDAQ:LVO) drops to US$218m market cap, insiders might rethink their US$621k stock purchase earlier this year

The recent 12% drop in LiveOne, Inc.'s (NASDAQ:LVO) stock could come as a blow to insiders who purchased US$621k worth of stock at an average buy price of US$2.80 over the past 12 months. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth US$616k which is not ideal.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for LiveOne

LiveOne Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Founder Robert Ellin for US$85k worth of shares, at about US$1.99 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$2.78. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

In the last twelve months LiveOne insiders were buying shares, but not selling. Their average price was about US$2.80. I'd consider this a positive as it suggests insiders see value at around the current price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

LiveOne is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

LiveOne Insiders Bought Stock Recently

Over the last quarter, LiveOne insiders have spent a meaningful amount on shares. Overall, two insiders shelled out US$222k for shares in the company -- and none sold. This makes one think the business has some good points.

Does LiveOne Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 18% of LiveOne shares, worth about US$40m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About LiveOne Insiders?

The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest LiveOne insiders are well aligned, and that they may think the share price is too low. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing LiveOne. For example - LiveOne has 3 warning signs we think you should be aware of.

Of course LiveOne may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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