Ready to find some penny stocks to buy this week? If you read our article about key catalysts during the post-holiday sessions, you already know that things begin to ramp up during the second half. Multiple Fed members are set to take the spotlight, including Chairman Jerome Powell. Monetary policy drives sentiment as investors weigh inflationary risk, quantitative tightening, and interest rates.
But even with the volatility in the stock market today, there are still plenty of opportunities to make money with cheap stocks. Don’t believe me? Let’s take a closer look at what some of Wall Street’s top hedge funds are doing lately, and you might change your stance on penny stocks.
In this article, we take a deep dive into some recent SEC filings that show money managers taking new stakes and even increasing current stakes in penny stocks. First, let me explain how to find penny stocks hedge funds decided to buy.
How To Find Penny Stocks With Hedge Fund Activity
As they say, the devil is in the details, and nothing quite shows the fine details like an SEC filing. Sure, you’ve got your standard 10Q (quarterly financial statement), 10K (annual financial statement), and 8K (material event). But when you want to follow the money, you should familiarize yourself with a few other filing types. Here are some to use to track institutional money flow:
Schedule 13D, Schedule 13G, and Schedule 13F Filings
These Schedules involve parties reporting ownership of stock over 5% of a particular equity class in a company. The SEC defines Schedules 13D and 13G as beneficial ownership reports.
“The term ‘beneficial owner’ is defined under SEC rules. It includes any person who shares voting or investment power directly or indirectly (the power to sell the security).”
13G & 13D Filings
Furthermore, when a person or group acquires beneficial ownership of more than five percent of voting shares, they’ll file a Schedule 13D. A 13G reports the acquisition and other information within ten days after the purchase. These filings would be highlighted by traders looking for “Whale” trades as they generally connect to large funds or investment trusts.
Because of this, it must be declared. There are much longer format definitions of these forms. The main difference involves the size of the investor. A Schedule 13D gets filed by an “active investor” and one owning more than 20% of a company’s outstanding shares.
A 13G pertains to “passive investors” owning less than 20% of a company’s outstanding shares. Once a “passive investor” reaches over 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 more significant position in a company. These typically lift sentiment for a given company.
13F Filings
Schedule 13F filings are where things get fun. 13Fs are quarterly reports required to be filed by institutional investment managers with at least $100 million in assets under management. Don’t think top Wall Street hedge funds own penny stocks? Think again and read one of the many articles below:
- Best Penny Stocks To Buy? Einhorn, Lynch, Cohen & Dalio Own These 5
- 10 Top Penny Stocks Cathie Wood ARK Invest Owns, Time To Buy?
- 5 Top Penny Stocks To Buy According To Insiders In March 2022
- 3 Penny Stocks Cathie Wood’s ARK Invest Bought In 2021, Will You?
One of the downsides to looking at these filings is that they are published after trades are made. So it will be up to you to decide if the data is valid when you find it.
Penny Stocks To Buy [According To Hedge Funds]
Nutex Health Inc. (NUTX)
Since its IPO, Nutex Health hasn’t traded as “healthy” as some may have hoped. In its market debut, shares exploded to highs of over $50, but as they sit today, NUTX stock is far from those levels. Nevertheless, that hasn’t meant it to be a bad stock to watch. Today shares surged on some of the highest trading volumes all quarter.
The physician-led healthcare technology company jumped back above the $3 level with no immediate news. However, the market seems to have put NUTX stock back in focus after being named one of 14 companies selected for the Houston Business Journal’s Innovation Awards. Nutex and the other honorees will be featured in the Business Journal later this month.
[Read More] What To Watch In The Stock Market This Week 9/5-9/9Are Hedge Funds Buying NUTX Stock?
Some of the most popular hedge funds on Wall Street have reported positions in NUTX stock. At the end of the second quarter, Paul Tudor Jones’s Tudor Investments, Ken Griffin’s Citadel Advisors, and BlackRock reported stakes worth upward of $5 million in NUTX stock. BlackRock is the largest holder with more than 1.66 million shares.
Avaya Holdings Corp. (AVYA)
Another technology company joining this list of penny stocks to watch is Avaya Holdings. It provides cloud services offering communications solutions for customer and employee applications. The company also raised eyebrows after reporting an expanded partnership with Sen Spirit Technology to provide Avaya’s OneCloud to businesses in Hong Kong last month. Sen Spirit distributes communication technology and enables government agencies, banks, and telecom industry customers to access cloud technology.
It’s also worth mentioning that AVYA stock is in the sights of traders hunting for short-squeeze stocks. That’s because, according to outlets like Fintel.IO, there is a 21.18% short in the stock as of this article.
Are Hedge Funds Buying AVYA Stock?
Despite the lackluster performance in the market, the recent trend for AVYA stock has seen a bit of a reversal. Shares continue bouncing back after they hit 52-week lows of $0.60 in August. But are institutions interested in this penny stock? According to the latest round of 13Fs, firms including Tudor Investment Corp., Citadel Advisors, BlackRock, and Israel Englander’s Millennium Management had stakes in the company at the end of Q2. But who is the largest holder? As of the last published 13F, Vanguard Group holds more than 9.5 million shares.
[Read More] Hot Penny Stocks to Buy After the Long Weekend? 3 to WatchArdelyx Inc. (ARDX)
Much like AVYA, Ardelyx has mounted a strong turnaround in the stock market over the last few months. Since hitting 52-week lows of $0.49 in June, ARDX stock has bounced back more than 100% to highs this week of over $1.15.
The biotech company is developing medicines targeting multiple indications. Its IBSRELA is its first approved product available in the US. Last month, Mike Raab, president and CEO of Ardelyx explained, “We are now three months into the launch of IBSRELA® for the treatment of IBS-C in adults, and see that the market is responding enthusiastically to this much-needed innovative therapy. We are building strong relationships with the treating community and across GI practices. Our sales and marketing launch efforts are raising visibility and building a foundational demand for IBSRELA.”
The company has set up several conference appearances throughout September. These include Citi’s BioPharma Conference on September 8th and HC Wainwright’s Global Investment Conference on the 13th.
Are Hedge Funds Buying ARDX Stock?
The answer is yes, and the list includes names like Steven Cohen’s Point72 Asset Management, Millennium Management, Citadel Advisors, BlackRock, Jim Simons’s Renaissance Technologies, and Vanguard Group. The largest holder as of an August 12th 13F filing? If you guessed Vanguard, you’d be correct.
23andMe Holding Co (ME)
The popular ancestry company 23andMe has become much more than that. It has expanded into genetics and research to help customers gain insight into the human genome. With numerous FDA authorizations for OTC genetic health risk reports and things like genetic cancer risk reports and medication insights, ME stock is evolving into more of a health tech platform.
Over the last few weeks, ME stock has found its stride and bounced back strongly from 52-week lows. One of the most significant catalysts was its earnings report and corporate guidance. The company forecast, “Full-year revenue for fiscal 2023, which will end on March 31, 2023, is projected to be in the range of $260 to $280 million, with a net loss in the range of $350 to $370 million. The full year adjusted EBITDA deficit is projected to be in the range of $195 to $215 million for fiscal year 2023.”
[Read More] How to Make Money With Penny Stocks in a Volatile MarketAre Hedge Funds Buying ME Stock?
Considering its higher profile brand recognition, it’s not surprising to see names like Brad Gerstner (Altimeter Capital), Jim Simons (Renaissance Technologies), David Einhorn (Greenlight Capital), and BlackRock on the roster. While Vanguard is one of the largest holders, it’s Ravi Viswanathan’s NewView Capital that has the top spot as of its most recent 13F filing posted in August. The fund has a stake of more than 19.4 million shares.
List of Penny Stocks In This Article
- Nutex Health Inc. (NASDAQ: NUTX)
- Avaya Holdings Corp. (NYSE: AVYA)
- Ardelyx Inc. (NASDAQ: ARDX)
- 23andMe Holding Co (NASDAQ: ME)
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