When it comes to investing, penny stocks have become an interesting niche. If you’re new to trading these types of stocks, it’s important to understand what your looking for and how to find it in order to put together a strong list of penny stocks to watch.
Penny Stocks: A Basic Definition
Penny stocks are stocks of usually small companies that typically trade at low prices, often below $5 per share. While some cheap stocks can be found on major exchanges like the NYSE or Nasdaq, many also trade over the counter, like on the OTC Bulletin Board. These stocks can be enticing due to their lower prices. Some even trade at a fraction of a cent. However, it’s important to note that low-priced stocks come with unique risks and require careful consideration before diving in.
Now, you might wonder, what’s the appeal of investing in penny stocks? Well, the allure lies in their potential for significant returns. Established blue-chip stocks tend to experience incremental price movements. On the other hand, Penny stocks have the potential to skyrocket in value over a short period. For those wanting high-risk, high-reward opportunities, these types of cheap stocks present a chance to capitalize on emerging trends. They can also be attractive to investors with limited capital, allowing them to diversify their portfolios without breaking the bank.
Finding Penny Stocks to Buy
News can be a valuable resource, as positive developments can drive interest. Staying informed about the latest stock market news can help you identify penny stocks that align with your investment goals. In addition to news, keeping an eye on unusual trading volume can also provide insights. Higher-than-average trading volume can indicate increased market activity, signaling potential price movements and capturing the attention of traders.
Another thing to explore is corporate filings. These can provide valuable insights into the financial health and prospects of a company. By analyzing these filings, you can gain a deeper understanding of the company’s performance, potential risks, and growth opportunities.
One strategy some traders consider when finding penny stocks is paying attention to insider buying activity. Insider buying occurs when executives, directors, or individuals with inside knowledge of a company purchase shares of their own company’s stock. Why is this significant? Well, insider buying can be seen as a positive signal. It may instill confidence in investors in the company’s future success. By tracking insider filings, which disclose these transactions, you can build a list of penny stocks that have captured the interest of insiders.
Penny Stocks To Watch
It’s important to approach investing in penny stocks with caution, as with all investment decisions. These stocks can be highly volatile and subject to market manipulation. Thorough research, due diligence, and risk management are key when venturing into this arena. Nevertheless, insider trading can spark bullish sentiment when management or large shareholders build upon their position. Here are 5 seeing a jump in insider activity recently.
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Ginkgo Bioworks (DNA)
Shares of Ginkgo Bioworks caught one of the most bullish waves of momentum all year at the start of this week. The cell programming and biosecurity company’s shares jumped over 20%, which was a continuation of its move last week.
Ginkgo reportedly reported earnings, missing on earnings per share but beating sales expectations. “In the 15 years since my co-founders and I launched Ginkgo, I have never been more optimistic than I am today,” said Jason Kelly, co-founder, and CEO of Ginkgo. “There is no doubt that we are going to be living in a challenging market environment for a while, but Ginkgo was built for these moments – we have worked hard to give ourselves a margin of safety so that we can relentlessly focus on our mission to make biology easier to engineer.”
Ginkgo Directors are the most recent to have begun buying up more DNA stock. The trades come after a slew of insider trading from larger holders put pressure on the stock recently. Harry Sloan and Shyam Sankar snagged 350,000 and 400,000 shares of DNA stock. Their average prices ranged from $1.265 to $1.295. The largest trade from Sankar was worth over half a million dollars and brought the total direct holdings to more than 1.7 million shares.
Porch Group (PRCH)
The home services company reported its latest round of financial results recently. Porch Group reiterated its full-year guidance, with revenue expected to come between $330 million and $350 million. Even though Porch missed earnings per share estimates, it beat sales expectations by a wider margin.
“Already in 2023 Porch Group has filed an application for a Reciprocal Exchange to move our insurance business forward and raised $333 million with a new convertible note alongside other key operational successes,” said CEO Matt Ehrlichman.
He also explained that “The Porch team achieved this while producing solid results despite a 26% year-over-year decline in home sales and the hardened reinsurance market. We are executing well and believe we are set up for important milestones ahead, including Adjusted EBITDA profitability for the second half of this year.”
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Ehrlichman has also been doing some insider buying of PRCH stock. Over the last week, he picked up more than 340,000 shares of the penny stock at average prices between $1.01 and $1.23. The most recent purchase was reported on May 17th for 134,462 shares.
Billed as the “global modern card issuing platform, Marqeta has seen an uptick in momentum after earnings. The company is known for its cloud-based payment infrastructure allowing customers to launch their own card programs. It also offers the ability to authorize and settle payment transactions.
In Marqeta’s latest financial results, the company beat sales estimates by a wider margin. But, LIke Porch, it missed earnings per share expectations. Simon Khalaf, CEO of Marqeta explained, “In the first quarter of 2023, we started to see our strategic focus on embedded finance and the implementation of new operating efficiencies pay off, laying a strong foundation for Marqeta’s future. Our financial results once again showed our ability to innovate at scale.”
Director Judson (Jud) C. Linville is the most recent to report insider action in MQ stock. He acquired 44,650 shares at prices ranging between $4.445 to $4.475 last week.
FiscalNote Holdings Inc. (NOTE)
Shares of FiscalNote have been on the rise over the last week following earnings. The company has developed an AI-driven software-as-a-service technology for policy and market intelligence. It managed to beat expectations for earnings per share and sales in the first quarter. FisclaNote was also selected by Google (NASDAQ: GOOGL) as a launch partner for integration with Google’s Bard AI technology.
Tim Hwang, FiscalNote’s Chairman, CEO, and Co-founder, discussed that “As a longtime innovator in AI and as a leader in the legal, policy, and regulatory intelligence domain, we envision a vast potential for the applicability of generative AI in the interaction and deployment of the unique data sets, analysis, and solutions we provide through our portfolio of world-class products and services.”
With this bullish outlook and plenty of attention on AI stocks, NOTE shares have gained steam. Adding to the excitement was also insider activity from Director Stanley McChrystal. He grabbed 23,000 shares of NOTE stock at an average price of $2.19 late last week. This brought McChrystal’s total direct holdings to over 181,000 shares.
List Of Penny Stocks
- Ginkgo Bioworks (NYSE: DNA)
- Porch Group (NASDAQ: PRCH)
- Marqeta (NASDAQ: MQ)
- FiscalNote Holdings Inc. (NYSE: NOTE)
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