GuruFocus Premium Membership

Serving Intelligent Investors since 2004. Only 96 cents a day.

Free Trial

Free 7-day Trial
All Articles and Columns »

Insiders Are Buying Lightwave Logic

July 17, 2014 | About:
maarnio

maarnio

1 followers

1 The Company

One electro-optical device company has seen intensive insider buying during the last 30 days. Intensive insider buying can be defined by the following three criteria:

- The stock is purchased by three or more insiders within one month.

- The stock is sold by no insiders in the month of intensive purchasing.

- At least two purchasers increase their holdings by more than 10%.

Lightwave Logic (LWLG) operates as an electro-optical device and organic nonlinear materials company.

Number of shares (July 11, 2014)

57,154,069

Number of options (July 11, 2014)

6,112,000

Warrants (July 11, 2014)

5,560,100

Fully diluted number of shares (July 11, 2014)

68,826,169

Share price

$0.95

Market cap

$54.3 million

Ticker

LWLG

1.1 History

The company was founded in 1991 as PSI-TEC Corporation and became a publicly traded entity in July 2004. PSI-TEC changed its name to Third-Order Nanotechnologies in October 2006, and again to Lightwave Logic in March 2008.

1.2 Business Model

Lightwave Logic is developing a new generation of advanced organic nonlinear materials to be used to make electro-optic polymers and non-linear all-optical polymers and photonic devices that utilize them.

Currently, the core electro-optic material contained in most modulators is a crystalline material, such as lithium niobate or gallium arsenide. The following chart describes some of the characteristics of crystalline materials and electro-optical polymers.

nimetön.png

(Source: Annual report)

Lightwave Logic considers organic polymers with electro-optic qualities to be the most feasible technology for future high-speed electronic-optical conversion.

2 Management

The CEO Thomas Zelibor has over twenty years of strategic planning and senior leadership experience. Thomas Zelibor has been CEO since May 2012. Collectively, Lightwave Logic’s executive team has over 50 years of industry experience.

2.1 Insider Ownership

Lightwave Logic’s directors and executive officers own 12.6% of the company.

Here is a table of Lightwave Logic’s insider activity during the last 30 days.

Name

Title

Trade Date

Shares Purchased

Private Placement

Current Ownership

Increase InShares

James Marcelli

COO

July 11

6,700

Yes

246,700 shares

+2.8%

Joseph Miller

Director

July 7

13,400

Yes

13,400 shares

from 0 to 13,400

Thomas Zelibor

CEO

June 24

6,700

Yes

50,124 shares

+15.4%

There have been 26,800 shares purchased by insiders during the last 30 days. All these shares were purchased pursuant to a private placement.

Here is a table of Lightwave Logic’s insider activity by calendar month.

Month

Insider buying / shares

Insider selling / shares

July 2014

20,100

0

June 2014

20,100

0

May 2014

0

0

April 2014

0

0

March 2014

0

0

February 2014

0

0

January 2014

0

0

December 2013

0

0

November 2013

0

0

October 2013

0

0

September 2013

0

0

August 2013

0

0

July 2013

0

0

June 2013

0

0

May 2013

0

0

April 2013

0

0

March 2013

0

0

February 2013

0

0

January 2013

0

0

There have been 40,200 shares purchased and there have been zero shares sold by insiders since January 2013.

2.2 Compensation

Here is a table of the named executive officers’ compensation.

nimetön.png

(Source: Prospectus)

The base salaries are reasonable.

Here is a table of the directors’ compensation for 2013.

nimetön.png

(Source: Prospectus)

Only two directors were given options.

3 Financial Summary

3.1 Current Situation

Lightwave Logic reported the first-quarter financial results on May 14 with the following highlights:

Revenue

$2,500

Net loss

$1.0 million

Cash

$1.9 million

Debt

$0

Lightwave Logic closed a $3 million financing on July 11.

3.2 Historical Developments

Here is a table of Lightwave Logic’s revenue and earnings since 2009.

Year

2009

2010

2011

2012

2013

Revenue ($)

0

3,200

0

0

0

Net loss ($ millions)

2.7

3.7

3.5

4.6

3.9

EPS

-0.07

-0.09

-0.08

-0,09

-0.08

Lightwave Logic had revenues only in 2010.

4 Shares

Here is a table of Lightwave Logic’s number of shares since 2009.

Year

2009

2010

2011

2012

2013

Number of shares (millions)

39.4

42.3

44.4

48.8

51.7

Lightwave Logic’s number of shares have grown 31.2% since 2009.

5 Outlook

Lightwave Logic’s goals for this year are:

  • To improve and optimize its materials and how they work in devices for the commercial market.
  • Complete several proprietary devices.
  • Continue to look for a photonic device company to acquire or enter into a joint venture.
  • Move from development stage to a commercial enterprise with a source of revenue. Identify other markets and applications for its devices.

6 Competition

Lightwave Logic’s main competitor is GigOptix (GIG). GigOptix has designed and patented potentially commercially feasible electro-optic polymers and holds an exclusive license to all electro-optic polymeric technology developed at the University of Washington.

7 Risks

I believe the main risks with Lightwave Logic are negative earnings, and very little revenues. Lightwave Logic is also a penny stock.

8 Conclusion

There have been three different insiders buying Lightwave Logic and there have not been any insiders selling Lightwave Logic during the last 30 days. Two of these three insiders increased their holdings by more than 10%

The three insiders purchased their shares at $0.75. I believe Lightwave Logic could be a good pick below $0.75 based on the intensive insider buying.

sc.png

Disclosure: The author has no positions in any stocks mentioned.

About the author:

maarnio
I have 15 years of investing experience. I have traded stocks, commodities and Forex markets.

Rating: 0.0/5 (0 votes)

Comments

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK