Read This Before Selling Lantronix, Inc. (NASDAQ:LTRX) Shares

It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Lantronix, Inc. (NASDAQ:LTRX).

Do Insider Transactions Matter?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.

Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.

See our latest analysis for Lantronix

The Last 12 Months Of Insider Transactions At Lantronix

The insider Martin Hale made the biggest insider purchase in the last 12 months. That single transaction was for US$165k worth of shares at a price of US$2.07 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$4.68. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Over the last year, we can see that insiders have bought 100.00k shares worth US$215k. But they sold 5.50k shares for US$28k. 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 want to know exactly who sold, for how much, and when, simply click on the graph below!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Lantronix Insiders Are Selling The Stock

We have seen a bit of insider selling at Lantronix, over the last three months. Independent Director Paul Folino sold just US$28k worth of shares in that time. It's not great to see insider selling, nor the lack of recent buyers. But the volume sold is so low that it really doesn't bother us.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company 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. Lantronix insiders own about US$10m worth of shares. That equates to 7.5% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Lantronix Insider Transactions Indicate?

Our data shows a little more insider selling, but no insider buying, in the last three months. However, the sales are not big enough to concern us at all. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in Lantronix and their transactions don't cause us concern. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For example - Lantronix has 1 warning sign we think you should be aware of.

Of course Lantronix 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.

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This article by Simply Wall St is general in nature. 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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