Insider Stock Buying Of Lantronix Delivers Return On US$1.22m Investment

Insiders who bought Lantronix, Inc. (NASDAQ:LTRX) in the last 12 months may probably not pay attention to the stock's recent 12% drop. Even after accounting for the recent loss, the US$1.22m worth of stock purchased by them is now worth US$1.58m or in other words, their investment continues to give good returns.

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.

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Lantronix Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when insider Haluk Bayraktar bought US$501k worth of shares at a price of US$2.14 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$2.94. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

In the last twelve months insiders purchased 536.83k shares for US$1.2m. On the other hand they divested 34.00k shares, for US$69k. In total, Lantronix insiders bought more than they sold over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

View our latest analysis for Lantronix

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insiders At Lantronix Have Bought Stock Recently

It's good to see that Lantronix insiders have made notable investments in the company's shares. Overall, five insiders shelled out US$257k for shares in the company -- and none sold. That shows some optimism about the company's future.

Insider Ownership Of Lantronix

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 12% of Lantronix shares, worth about US$14m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About Lantronix 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. Insiders likely see value in Lantronix shares, given these transactions (along with notable insider ownership of the company). In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Lantronix. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of Lantronix.

But note: Lantronix may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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 of direct interests only, but not derivative transactions or indirect interests.

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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.