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Anthony Noto bought a bunch of Twitter stock earlier this month. Image source: Flickr/TechCrunch.

Shares of Twitter (NYSE:TWTR) climbed earlier this month after news that co-founder and interim CEO Jack Dorsey had purchased almost $900,000 worth of shares. But perhaps he was only following his financial officer's lead.

CFO Anthony Noto purchased about $200,000 worth of Twitter stock the week before, and he was the first Twitter executive to buy shares of the company in 2015. His first purchase actually came in May, but it didn't have quite the effect of his most recent purchase. Not only did Dorsey follow Noto's example, so did board members Peter Currie and Peter Fenton, who purchased about $250,000 and $200,000 in shares, respectively.

Should you be the next person to follow Anthony Noto and buy shares of Twitter?

Nobody knows Twitter like Noto
As CFO, Noto certainly has more insight into Twitter's financial future than anybody else. Since going public, however, Twitter has hardly traded on its financials. It's traded on momentum and user growth; when those things slowed, the stock started going down.

That can be an opportunity for long-term investors, however, because a stock's value ought to reflect the future earnings of the underlying company -- not the future user growth. And while more users would make it easier to earn more money, Twitter isn't even close to maximizing the value of its current users. That much is clear from the 61% increase in revenue last quarter despite the paltry 12% growth in its active user base (not including SMS fast followers).

But Twitter has had a hard time converting its potential into actual profits, and it doesn't look like that's going to happen anytime soon. The company is still conducting a search for a permanent CEO, while Dorsey indicated the company's main focus is still increasing its reach and driving engagement. In fact, he's reorganizing the product division to suit those goals. Moreover, in the short term, Noto warned investors that they shouldn't expect significant user growth.

Still, there must be value in a service that repeatedly strikes fear into the Turkish government (and others), breaks news before the newswires (including Twitter's own earnings results), and can make or break a political candidate's campaign. Finding a management team to take advantage of Twitter's potential will be critical over the next few months.

What Twitter is actually focused on
Twitter's big focus, based on its most recent earnings call, is Project Lightning -- a feature that curates videos, photos, and tweets around big events. It's going to do its first major marketing campaign around the launch of the new feature, hoping it will increase both the reach and engagement of its total audience -- i.e., both logged-in and logged-out visitors.

While Project Lightning has excellent monetization potential, it's not going to move the needle at Twitter for some time. Management indicated no immediate plans to monetize the new feature, but the interest-based, large-event focus should make it easy to insert brand advertising with high returns -- similar to Snapchat's Our Story features.

In other areas, Twitter is experimenting with various features to provide more value to its users, but Dorsey said its products aren't increasing user growth or retention.

Investors can expect Twitter to continue increasing spending with new product development (R&D) and the big marketing campaign push (SG&A) behind Project Lightning that will extend into 2016. Those expenses, coupled with Twitter's already-high R&D spending will continue to drag on its bottom line.

It could all be worth it, though
Twitter is a risky company to invest in, but investors could be rewarded for taking the risk.

As mentioned, the company's main product has a ton of potential. Periscope, which it bought earlier this year, just announced it had notched 10 million registered users within five months. Vine, meanwhile, serves up billions of six-second videos every month to its 100 million monthly active users. All three of these products have tremendous potential for monetization, which could eventually trickle down to Twitter's bottom line as it scales its ad business and R&D spending becomes a lower percentage of revenue.

The flip side is that Twitter may never get its users to close the gap between a new user that follows no one and a power user with a well-curated timeline. It may never convince brands or advertisers that six seconds is enough to properly deliver a message on Vine. Advertising on Periscope may prove difficult to get right.

A lot of this will depend on management, and with the current management situation in flux, it's hard to recommend the stock.

Adam Levy has no position in any stocks mentioned. The Motley Fool recommends Twitter. The Motley Fool owns shares of Twitter. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.