Penny Stocks Insiders Are Scooping Up
Is there a secret to finding the best penny stocks to buy right now? If you ask some traders, they’ll tell you to follow the money. But what does that actually mean? This entails following big trades made in the market & that goes for both buys and sells. In this article, however, we’re going to focus on following big money insider bets on penny stocks today.
But before we dive in, remember that just because insiders buy, that’s not a guarantee stocks will climb. Furthermore, it’s important to look at the finer details of the trades. Were they planned, were they options executions, were they stock grants or were they open market purchases?
How To Find Insider Buying
Suppose you’re new to this idea of “following the money.” You might not know how to search for these events. Lucky for you, I’ll give you some of the basics. Instead of hoping for some random broker to call you and tell you, “Blue Horseshoe loves Anacott Steel,” the Securities & Exchange Commission has made it even easier.
Just look at the filings. Check out any of the stock profile pages on PennyStocks.com, and you’ll see all filings on the “SEC Filings” tab. There are many different filing types to consider. But, for insider/affiliate activity – sometimes called Whales for the sizeable trades made – you’ll want to focus on just a few filing types. These include Form 3s, Form 4s, and sometimes Form 5s.
What’s A Form 3?
These are usually less frequent but worth knowing. Form 3s get filed when someone first becomes an insider. Examples of this include new hires brought on as officers or directors of a company. This Form shows the initial ownership position in the company’s securities and gets filed within 10 days of becoming an insider.
What’s A Form 4?
These will show an insider’s various transactions in company securities. It includes the amount purchased/sold, the price per share, and the transaction date. The Form must also be filed within 2 business days following the final transaction date.
What’s A Form 5?
Form 5’s are the “clean up” form, in my opinion. These are usually filed 45 days after a company’s fiscal year-end. They’re only required when an insider makes at least 1 transaction because of failing to report earlier or from an exemption that wasn’t reported during the year. Certain insider purchases for less than $10,000, for example, may not be required via a Form 4. However, they have to eventually get disclosed, in which case, these transactions are reported via Form 5.
What Are Schedule 13D and Schedule 13G Filings?
These Schedules involve parties reporting ownership of stock over 5% of a certain equity class in a company. That 5% threshold is considered “significant ownership” of a company.
Because of this, it must be declared. There are much longer format definitions of these forms. But the main difference involves the size of the investor. A Schedule 13D gets filed by an “active investor” and those owning more than 20% of a company’s outstanding shares.
[Read More] What Is The Best App For Penny Stocks?
A 13G pertains to “passive investors” owning less than 20% of a company’s outstanding shares. Once a “passive investor” reaches more than 20% of the OS, they must start filing 13D statements. These are important because we’ll see which large funds or investors are taking a larger position in a company. These typically lift sentiment for a given company. For more information on different filing types and more basics on trading penny stocks, download The Beginner’s Handbook For Trading Penny Stocks.
5 Penny Stocks Insiders Are Buying Right Now
Hall of Fame Resort & Entertainment Company (NASDAQ:HOFV)
HOFV stock has been one to watch for most of the year. While shares have pulled back from their early 2021 highs, it’s still up nearly 100% year-to-date. Some of the excitement driving momentum includes the upcoming NFL football season and growing interest in things like NFTs.
What Does Hall Of Fame Do?
Hall Of Fame Resort & Entertainment Company has several things going for it all centered around pro sports. The company owns the Hall of Fame Village powered by Johnson Controls, centered around the Pro Football Hall Of Fame in Canton, Ohio. It’s launching country music concerts, setting up a fantasy sports business with NFL legends, and using its reach in pro sports to start a line of non-fungible tokens (NFTs) for 6 football all-stars.
The company also recently launched a partnership with Esports Entertainment Group to be the official esports provider and operate a Helix eSports entertainment center scheduled to open next year. If you’ve got an interest in pro sports, NFTs, online gaming, fantasy sports, and the like, Hall Of Fame Resort & Entertainment is likely a company you might’ve heard of this year.
HOFV Stock & Insider Activity
If you check out the HOFV stock profile page, you’ll see a few recently filed Form 4s this month. The most recent from August 25th is the one we’re looking at right now. It showed CEO & Chairman Michael Crawford picking up 20,000 shares of HOFV stock at an average price of $2.89 on August 24th. Valued at $57,800, this latest purchase brought Crawdford’s position to over 2.1 million shares of company stock.
Eyenovia Inc. (NASDAQ:EYEN)
EYEN stock has faced its share of adversity this year. But the recent bullish trend seems to have brought some upbeat sentiment to Eyenovia stock at the end of August. What’s more, daily trading volume has also been picking up this week. Much of this has to do with recent corporate developments, including earnings and insider trading.
What Does Eyenovia Do?
Eyenovia is a biotech company developing an ophthalmic treatment pipeline based on its microdose array print or “MAP” platform. Its therapeutic candidates include late-stage treatments for presbyopia, myopia progression, and mydriasis. With a focus on developing a platform that delivers a better result than traditional eye-droppers, there’s been some demand seen for its portfolio. This was demonstrated in Eyenovia’s recent second-quarter results.
The company recorded an earnings per share beat and gave new details on its pipeline. Topline data from its Phase 3 VISION-1 trial of the presbyopia therapy, MicroLine showed subjects were 7.7 times more likely to achieve the primary endpoint compared to placebo. Based on this, the company expects to move forward with plans to start a second Phase 3 trial of MicroLine by the end of the year.
“With compelling efficacy and tolerability in patients, MicroLine, if approved, could become a promising new alternative for patients who desire a temporary, on demand alternative to reading glasses, particularly in indoor or low light conditions, a clear differentiator versus many other presbyopia therapeutics in development. We continue to anticipate initiating a second Phase 3 trial, VISION-2, by the end of the year, and anticipate topline data in mid-2022.”
CEO Dr. Sean Ianchulev
EYEN Stock & Insider Activity
If you check out the EYEN stock profile page, you’ll see a few recently filed Form 4s this month. The most recent showed 10% Owner Stuart Gran picking up over 70,000 shares at average prices ranging from $3.93 and $4. With more than $296,000 worth of stock purchased, this brought Grant’s holdings to more than 4.38 million shares of the company.
Alto Ingredients Inc. (NASDAQ:ALTO)
ALTO stock has mirrored a similar trend as EYEN this year. Year-to-date it’s down slightly. But from its 2021 highs, you can clearly see that selling pressure played its own role over the last few months. Recent insider buying and optimism surrounding sales growth seem to have been a bullish point of focus in the market.
What Does Alto Do?
Alto Ingredientsproduces specialty alcohols and essential ingredients. In particular, it focuses on food, beverage, and health markets. While its latest earnings showed an EPS miss ($0.11 vs. $0.15 Street estimates), sales beat by a considerable margin of roughly $10 million for the quarter. “In the second quarter, we produced our fifth consecutive quarter of gross profit and had net income of $8.1 million and Adjusted EBITDA of $17.0 million,” said Mike Kandris, CEO of Alto Ingredients.
“For the first half of 2021, we generated net income of over $12 million and EBITDA of over $30 million representing a year-over-year improvement in EBITDA of $14 million, a further testament to the benefit of our transformation efforts…we are now pursuing opportunities to expand profitably through enhanced service offerings and products, reinvestment in infrastructure, and accretive vertical integration,” Kandris continued.
Analysts including HC Wainwright, Craig Hallum, and Guggenheim all have Buy ratings on the penny stock right now. Furthermore, Craig Hallum and Guggenheim issued price targets of $11 and $9 respectively this summer.
ALTO Stock & Insider Activity
If you check out the ALTO stock profile page, you’ll see a few recently filed Form 4s this month. These showed Director Gilbert Nathan scooping up 31,000 shares of ALTO stock at prices ranging from $4.45 to $5.10. Valued at over $150,000, this latest round of purchases brought Natha’s direct ownership position to over 400,000 shares of company stock.
Cocrystal Pharma Inc. (NASDAQ:COCP)
COCP stock has been moving over the last week and now retested a major technical level on the chart. If you look at the 50-day moving average, this seems to have been a consistent level that COCP stock hasn’t managed to hold levels above for any extended periods of time since February. Needless to say, this is the latest in a series of instances that it has once again tested this level. Insider trading and earnings are what the market seems to be focusing on right now.
What Does Cocrystal Do?
Cocrystal Pharma is part of the list of coronavirus vaccine stocks. The clinical-stage company has several programs in its pipeline, including treatments for influenza and COVID-19. The most near-term of which, the influenza program is in the spotlight as a Phase 1 trial is expected to begin this quarter. Its COVID-19 program preclinical development is expected to start next year.
Sam Lee, Ph.D., President and co-interim CEO of Cocrystal, explained earlier this month, “We are encouraged by recent in vitro laboratory data indicating CDI-45205 is highly active against the SARS-CoV-2 (Wuhan strain) as well as four variants of concern, including the Delta variant. We are also very excited by recent preclinical data with our SARS-CoV-2 oral inhibitors. We plan to initiate drug substance and drug product manufacturing with these oral inhibitors this year.”
COCP Stock & Insider Activity
July was a big month for insider activity in COCP stock. However, if you check out the stock profile page, you’ll see more Form 4s this month. The most recent from Director Richard Pfenniger picking up 40,000 shares of COCP stock at an average price of $1.028 on August 20th.
Scopus BioPharma Inc. (NASDAQ:SCPS)
SCPS stock has traded sideways for the majority of the year. While there have been a few instances of single-day breakouts, the trend has held below its 50-day moving average in a channel. That channel has a range, though, which is between $4 and $7. So we’re talking about a relatively wide range in this case. The last few days have seen SCPS stock recover slightly from its 52-week lows of $4, with volume increasing a bit. You’ll also notice that, in general, daily activity is lower than some of the other companies discussed on this list of penny stocks. Needless to say, insider action and upbeat sentiment for biotech stocks may have played a role in this latest reversal in the market.
What Does Scopus Do?
Scopus Biopharma is a biotech company focused on advancing immunotherapies. Since June, the company has been going through its growing pains following the acquisition of Olimmune in June. The deal, however, helped give the company’s platform a boost with the addition of new cancer therapeutics. The companies’ combined assets now gave Scopus exposure to a broad range of hematological malignancies and solid tumors. Olimmune’s “oligonucleotide” immunotherapies target treatment-resistant and metastatic cancers. Its lead drug candidate, OLIM-01, is under development for genitourinary and head & neck cancers. News in July also showed Scopus brought on a new President, Alan Horsager, Ph.D., who served as Olimmune’s CEO & President. One of the things at play is the market focus on SCPS as a low float penny stock. This has clearly become a factor over the last few months as social sentiment has focused on stocks like this.
SCPS Stock & Insider Activity
If you check out the SCPS stock profile page, you’ll see a slew of Form 4s filed over the last few weeks. You’ll also see a few Schedule 13Ds that coincide with some of the Form 4s as the insiders purchasing own shares indirectly through entities that filed the 13Ds. The entities in question are HCFP/Capital Partners 18B-2 LLC and SCPS/Strategic Capital Partners LLC. These reported holdings of 14.2% and 5.6%, respectively, in SCPS stock.
Are Penny Stocks Worth It?
Obviously, insider buying is generally seen as a positive by investors. However, it’s important to remember that the same $200,000 to one insider may not represent as much significance as the $20,000 to another insider. What I mean is that “big dollar amounts” to some people may not be as “big” of a position size to others. Keep that in mind when looking at stocks with insider buying. At best, take account of this insider activity and add it into a much larger thesis based on more than just insider activity.