LTRX

Lantronix ($LTRX) CEO Executes Third Major Stock Purchase Despite Poor Performance and Share Plunge...Executives and Directors Continue 'Concentrated Buying' Pattern

05/13/2025 22:40

IoT solutions provider Lantronix ($LTRX) has been exhibiting notable insider trading patterns recently. With a current market capitalization of approximately $84 million, this small-cap company specializing in IoT embedded solutions and edge computing technology has shown distinct shifts in insider transaction patterns. Lantronix's stock price reached the $4.40 range in mid-September 2024 before plummeting approximately 35% to the $2.60 range in early November. After briefly recovering to the $4.40 level in early January 2025, it declined again in early February and is currently trading around $2.10. This price volatility has been accompanied by clear shifts in insider trading patterns. From June through October 2024, major shareholder Bernhard Bruscha concentrated on selling shares. During this period, Bruscha sold over 239,000 shares worth approximately $1.01 million, with particularly concentrated selling occurring in mid-September when the stock price reached its yearly high. Bruscha, who also serves as managing director of TL Investment GmbH, provided a notable signal through this consistent selling pattern. Interestingly, after the stock price collapsed in November 2024, insider trading patterns abruptly shifted from selling to buying. Between November 12-13, Director Philip Brace purchased 20,000 shares ($52,920), and most significantly, President and CEO Saleel Awsare acquired a substantial 80,000 shares ($212,960) on November 13. Later that month, Director Hoshi Printer also purchased 15,350 shares ($44,497.50). This concentrated buying pattern continued into 2025. When the stock price declined again in late February and early March, CEO Awsare added 15,000 shares ($37,965), while multiple directors including Kevin Palatnik, Hoshi Printer, and Narbeh Derhacobian each purchased between 10,000-20,000 shares. Most recently, on May 13, 2025, CEO Awsare reinforced his confidence in the company by acquiring an additional 15,011 shares ($31,688.22). These insider buying patterns are particularly noteworthy when considering Lantronix's recent financial performance. In its Q1 2025 (ending March) results announced on May 9, 2025, the company reported revenue of $28.5 million, a 30.8% decline year-over-year, with adjusted earnings per share of 3 cents, down significantly from 11 cents the previous year. This slightly missed analysts' expectations of $29.11 million in revenue. Looking at Lantronix's financial situation, trailing twelve-month revenue stands at $155.84 million with a net loss of $4.91 million, resulting in a profit margin of -3.15%. However, the company maintains $19.21 million in cash and a current ratio of 2.56, indicating reasonable short-term liquidity. Additionally, its debt-to-equity ratio is relatively low at 17%, suggesting a stable financial structure. Despite recent challenges, the company continues to focus its strategy on IoT and edge AI technologies. In August 2024, Lantronix entered into a cooperation agreement with 180 Degree Capital Corp., bringing Narbeh Derhacobian and Kevin Palatnik onto its board of directors. Both subsequently participated in active share purchasing. Industry experts note that while Lantronix faces short-term challenges, the long-term growth potential in the IoT and edge computing markets remains promising. The company's revenue is expected to grow at an average annual rate of 7.6% over the next three years, slightly outpacing the U.S. communications industry average of 7.3%. Currently, Lantronix's valuation metrics include a price-to-sales ratio of 0.55, price-to-book ratio of 1.05, and forward price-to-earnings ratio of 5.53, all relatively low compared to industry peers. This suggests potential undervaluation despite current difficulties, particularly considering growth potential. The concentrated buying behavior from executives and board members generally signals confidence in the company's fundamentals and long-term outlook. CEO Awsare's additional purchase on May 13, immediately following the earnings announcement, strongly suggests he believes the current stock price fails to properly reflect the company's intrinsic value. Investors should, of course, also consider Lantronix's declining revenue and profitability trends, along with the intensely competitive environment in the IoT market. The company's guidance for the next quarter projects revenue of $26.5-30.5 million and non-GAAP earnings per share of 0-2 cents, indicating continued weakness. In conclusion, Lantronix's insider trading patterns have distinctly shifted from major shareholder selling to concentrated buying by executives and board members. This pattern suggests that despite current financial challenges, there exists a positive long-term outlook within the company. Future stock recovery will likely depend on improvements in financial performance and the success of strategic initiatives.

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