Director makes $1.4 million buy.
Walter Loewenbaum picked up 81,657 shares at Luminex Corporation (LMNX), where he serves as a director. Shelling out just under $1.47 million, the buy increases his stake by just 4.1 percent. This is the second insider buy this year following a 5,000-share pickup by the CEO in August.
Insider data shows large selling activity from 2018 to 2018, followed by a lull with no activity before the current insider buying.
This shift may indicate that management has gone from seeing shares overvalued to undervalued, which also matches the share price move from the $30 range into the high teens in the past few years.
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Action to take: The company, a manufacturer of high-tech medical scanning and diagnostic devices, is not an obvious buy here even with a 30 percent drop in shares in the past year, even as other companies in the space look attractive. While revenue has been growing, the company is still not profitable, and looks set to breakeven at best in the next quarter. While insiders are buying now, that buying may be a bit early in this case.
Investors may want to hold off until earnings show an actual profit for the company, or for further massive insider buying by multiple insiders to indicate a stronger buying point.
Speculators expecting a move higher on just the director purchase have some limited options, of which the April 2020 $17.50 options are the best bet. Already about $1.00 in the money, they should move penny-for-penny higher with shares.