Insiders Are Eating Up These Penny Stocks Right Now
Looking for the best penny stocks to buy right now? You could search hundreds of charts or sift through scanners. But some traders “follow the money” when it comes to trading. What do I mean? When you’re talking about public companies, a few requirements need to be met, according to the Securities & Exchange Commission. One of these requirements is public disclosures, and in this article, I’m going to talk about insider reporting.
Now, we’re not talking about getting a hot tip from your buddy about “inside info”; that’s not the insider trading I’m talking about. Today we’re talking about stocks that insiders of companies – management, board members, etc. – are spending their own money on. What if there was a way to know exactly when, how much, and at what price insiders buy shares in their own companies? Well, there is, and it can be found in corporate filings.
How To Find Insider Buying
There isn’t some crazy hidden place online that only “pro traders” have access to. As far as insider activity goes, it’s pretty easy to find. Form 4 filings are the most frequently referenced. These show insiders and different transactions. The info you’ll see is the transaction date, shares purchased/sold/issued, the average price per share, and any footnotes. There are also a few other types you’ll want to be aware of. For more information on all types of filings, check out “The Beginner’s Handbook For Trading Penny Stocks.”
At the very least, insider trade data can help you gauge the general sentiment of the people “pulling the levers” and “pushing the buttons” inside a company. When it comes to footnotes, these will also be important. In some cases, insiders schedule periodic purchases and sales. This usually isn’t taken the same way as open market purchases or sales.
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For instance, Amazon (NASDAQ: AMZN) CEO Jeff Bezos sells several billion dollars worth of AMZN stock per quarter, no matter the stock price. This is a pre-planned event that has little to do with the company or its success/failure. In this article, we’ll take a look at 5 penny stocks with recent insider buying. Will they be on your list this quarter?
Penny Stocks To Buy According To Insiders
- Arc Document Solutions (NYSE: ARC)
- Aptose Biosciences (NASDAQ: APTO)
- Ault Global Holdings (NYSE: DPW)
- Mustang Bio Inc. (NASDAQ: MBIO)
- Ascent Solar Technologies (OTC: ASTI)
Art Document Solutions (NYSE: ARC)
Shares of ARC Document Solutions have been on the move since the start of August. In fact, over the last 4 sessions, ARC stock hasn’t seen one red close yet. You may also notice that shares have climbed on relatively lighter volume than many of the stocks we discuss have seen. With less than 43 million shares outstanding and a market cap of just over $100 million, it is a smaller company, which could support such a move on the recent volume. Needless to say, shares of ARC stock have jumped this month after the company reported its second-quarter earnings.
The document solution company saw net sales, gross margin, and earnings per share jump compared to the same 3-month period last year. In fact, EPS showed the largest increase at $0.06 per share versus just $0.03 last year.
“The diversity of our products and services continue to drive expansion into digital color production and the economic re-opening is bringing new vitality to our existing customers in the AEC market. Every major category of sales grew during the second quarter.”
If you head over to the ARC stock profile page, you’ll also see insiders buying up shares of this penny stock in August. The company’s CEO picked up just over 47,000 shares at average prices ranging from $2.0914 to $2.323 between August 2nd and 4th.
Aptose Biosciences (NASDAQ: APTO)
Shares of Aptose have experienced a very different trend in the stock market this year. Year-to-date, the penny stock is down over 35%. But, the recent fundamental activity could be a point of focus for the market. Let’s dig a bit deeper and see why.
While the year hasn’t been great, August is a different story. Shares of APTO stock have held above $2.50 and continue testing upper levels in the multi-week channel around $.280. Something that may have helped with the more sustained sideways trend (versus continued downtrend) is recent earnings results.
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Aptose reported an earnings per share miss of a $0.15 loss per share versus an expected $0.14 loss. However, as an early, clinical-stage company, the focus may be less on financials and more on pipeline progress. In this case, the company discussed its current Phase 1 a/b trials with its luxeptinib treatment in acute myeloid leukemia and B-cell malignancies. William G. Rice, Ph.D., Chairman, President, and Chief Executive Officer, “As we have begun to observe dose-dependent anti-tumor activity, we plan to continue dose escalation for extended duration to treat as many patients as possible on these higher dose levels and tackle these increasingly refractory patient populations.”
While this may have been an initial attraction in the market, insider activity could be another. Donald R Wilson Jr., a 10% owner through DRW Investments, picked up 57,199 shares of APTO stock at an average price of $2.647 on August 3rd. However, the same Form 4 showed DRW selling 60,000 shares on August 5th at an average price of $2.62. See more SEC filings on the APTO stock profile page.
Ault Global Holdings (NYSE: DPW)
Another one of the penny stocks with insider activity is Ault Global. The company has focused efforts on becoming a more diversified investment company over the last few months. Ault recently boosted its investment in neurodegenerative and psychiatric disorder treatment company Alzamend Neuro Inc. (NASDAQ: ALZN).
Alzamend recently submitted an investigational new drug application to the FDA to begin a Phase 1 study of its AL001. This is the company’s oral therapy for dementia related to Alzheimer’s disease. Obviously, with the excitement surrounding Biogen’s (NASDAQ: BIIB) Alzheimer’s treatment earlier this quarter, Alzamend could be something to keep track of.
This update came just a few weeks after Ault formed a real estate equities company to begin commercial real estate investing. AGREE (Ault Global Real Estate Equities) will focus on middle-market real estate in the US.
These may have been intermediate catalysts for recent market volatility. However, insider activity has also come into focus. The DPW stock profile page shows a string of Form 4s filed between July 9th and August 5th. The most recent filings in August show purchases of company stock being made by Executive Chairman Milton Ault, III. In total, 4 Form 4s were filed showing the purchase of a total of 40,000 DPW shares. Prices range between $2.3269 and $2.4699. In a separate Form 4 on the ALZN stock profile page, Ault III reported purchasing over 2 million shares of Alzamend at an average of just over $1 per share.
Mustang Bio Inc. (NASDAQ: MBIO)
Shares of Mustang Bio jumped at the end of the week this week thanks to attention on the company’s latest insider action. On August 5th, you’ll see on the MBIO stock profile page that Manuel Litchman, President & CEO, picked up 86,206 shares of MBIO stock at an average price of $2.91 at the end of July.
This purchase came just days before Mustang announced receipt of the European Medicines Agency Priority Medicines designation. This was for Mustang’s MB-107 treatment for x-linked severe combine immunodeficiency in infants, also known as bubble boy disease.
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The Agency also granted Advanced Therapy Medicinal Product classification to the drug in April and Orphan Drug designation last November. Right now, MB-107 is being assessed in a Phase 1/2 clinical trial at St. Jude Children’s Research Hospital, Seattle Children’s Hospital, and UCSF Benioff Children’s Hospital.
Ascent Solar Technologies (OTC: ASTI)
Finally, the only OTC penny stock on this list, Ascent Solar, has been climbing back this month. The latest move comes after about a quarter and a half of selling pressure took ASTI stock below its 200 Day Moving Average for the first time since 2020. While excitement has built back up in renewable energy stocks and solar specifically, other developments have also helped give the solar stock a boost.
First, the company inked a deal with a new funding partner, BD 1 Investment Holding. Ascent entered into a securities purchase agreement for roughly $10 million in new funding, with BD 1 purchasing over 660 million shares at an average price of $0.015 per share. “This new funding agreement is a strong vote of confidence from our controlling shareholders to the restructuring and recapitalization effort undertaken by Ascent Solar since early 2020,” said Victor Lee, President, and CEO of Ascent Solar Technologies, Inc.
Ascent also participated in a US Special Operations Command Technology Experimentation. The company demonstrated the performance of its CIGS PV systems, a mobile power solution. Since these updates, ASTI stock has bounced back. From August 2nd to the 6th, shares are up by roughly 50%.
Penny Stocks With Insider Buying
Regardless of price, insider activity is something to keep tabs on. In some cases, it can alert you to potential opportunities. On the other hand, it can reveal certain funding activities that may not have been announced in a formal press release. Whatever the case, at the very least, you can use this piece of info as another layer in your research process to find profitable opportunities or avoid losing trades.
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