Insider trading activity in stocks, including penny stocks, involves company insiders buying or selling company stock. Insiders can be executives, directors, and major shareholders of a company. They report these trades to the Securities and Exchange Commission (SEC) using forms such as Form 4s or Schedule 13s. Legal insider trading can provide valuable information for investors, though nothing is guaranteed.
Insider trading activity can stoke positive or negative sentiments about a company. For instance, insiders buying stock in a company can indicate they have confidence in its prospects. In contrast, insiders selling shares may suggest they have concerns about the company’s performance. This information can guide decisions on whether to buy or sell a stock.
The data can be helpful when deciding on which penny stocks to buy or avoid. These are low-priced stocks trading for less than $5 per share. While they can be risky investments, they also have the potential for high returns. Analyzing insider trading activity in penny stocks can help investors identify companies insiders believe have strong potential.
How To Find Penny Stocks For Your Watch List
To find a list of penny stocks to watch, investors can use a stock market screener tool to filter for stocks with low share prices and high trading volume. Investors can also look for companies with recent insider buying activity, which suggests that insiders have confidence in the company’s prospects.
It’s crucial to remember that insider trading activity alone should not be the sole basis for making investment decisions. Investors should also consider other factors. Nonetheless, it can provide valuable insights into a company’s outlook and should be part of a comprehensive investment strategy. Today we look at a handful of penny stocks with insider trading activity. Some have seen a large amount of buying, while others see insiders selling stock.
Penny Stocks To Watch
Akebia Therapeutics Inc. (AKBA)
Shares of Akebia Therapeutics have been on the rise for months. Since the end of November, AKBA stock climbed as much as 380% when it reached highs of $1.20 last month. The company met with the FDA to discuss its appeal and next steps regarding an interim response from the FDA to its Formal Dispute Resolution Request from a Complete Response Letter last March for its vadadustat platform—Akebia’s vadadustat, which was under review as a treatment for anemia due to chronic kidney disease.
Last month, Akebia announced a delay in reviewing its platform’s drug appeal but also reported a favorable CHMP opinion in Europe for the drug candidate. It announced that the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency adopted a positive opinion. This was regarding recommending the European Commission to approve Vafseo™ (vadadustat) for treating symptomatic anaemia associated with chronic kidney disease. This will be reviewed, and a final decision will be delivered. Akebia said the decision will be made within two months.
AKBA Stock Insiders…Selling?
What’s happening with insiders? Next week Akebia reports its Q4 and full-year 2022 earnings. At first glance, some insiders have sold AKBA stock ahead of these earnings. Like all SEC filings, it’s important to read the details. Specifically, the footnotes of all recent sales state, “This sale was made automatically by the Issuer to cover tax withholding obligations in connection with the vesting and settlement of one-third of the reporting person’s restricted stock units granted.”
In addition, an amended 13G filing in February showed that Muneer A. Satter upped a previous stake to 8.2% in Akebia.
Ardelyx Inc. (ARDX)
One of the hot penny stocks to watch over the last few months has been Ardelyx Inc. Share prices have surged from around $0.50 last June to highs of over $3.70 this month. The significant extension has been powered by Ardelyx and its string of important milestones. Among these was one that came out right before the end of 2022. The company reported an FDA committee backed its kidney disease drug candidate and recommended its approval.
– Avoid Common Penny Stocks Trading Mistakes With These Tips
The panel voted 10:2 in favor of combining the drug with phosphate binders. Ardelyx’s Xphozah is a standalone therapy for controlling serum phosphorus in chronic kidney disease patients on dialysis. The FDA also granted Ardelyx an appeal for its treatment candidate, Xphozah, and a Complete Response letter for a New Drug Application.
This week the company reported its latest round of earnings results and provided a business update. In particular, management said, “2022 was a remarkable year for Ardelyx, having met significant milestones that demonstrate our deep and profound commitment to bringing our novel mechanism products to patients in need…after the positive outcome of our appeal process for XPHOZAH, and a productive Type A meeting with the Food and Drug Administration in February 2023, we believe we are now on the path to launching another important medicine in the second half of the year for patients on dialysis.”
ARDX Stock Insiders…Selling?
Ahead of next week’s appearance at the Cowen Health Care Conference, analysts at Wedbush upgraded Ardelyx to Outperform from Neutral. The firm also doubled its $3 target to $6. So when you look at insider activity on the surface, it may seem unusual that they are selling shares right now. Again, it’s important to read the fine details. In this case, the footnotes of all recent sales state, “Pursuant to an automatic sell-to-cover imposed by the terms of the initial grant of the restricted stock units (“RSUs”) awards, the shares were sold upon the vesting of the RSUs solely to cover applicable withholding taxes,” and nothing related to open market selling specifically.
Joby Aviation Inc. (JOBY)
The company is developing electric vertical take-off and landing aircraft or ‘eVTOL.’ Other than being on the list of Cathie Wood penny stocks, Joby has recently begun the final assembly of its first company-conforming eVTOL aircraft.
The news came on the heels of an update on its certification process with the FAA. It was the second of five stages necessary to be completed. Specifically, management said, “Joby has also already made substantial progress in the third stage of the certification process, with four area-specific certification plans submitted to the FAA as of November and the Company’s first equipment-level qualification test plan submitted to the FAA, enabling for-credit qualification testing to proceed. Progress also continues in stage four and stage five.”
Expectations are to launch commercial aerial ridesharing services in the US by 2025. What’s more, thanks to strong earnings and an EPS beat, it appears some optimism has returned to JOBY stock.
JOBY Stock Insiders…Selling?
Do insiders see the same thing? Well, the last round of activity saw them selling company shares. Again, the devil is in the details, and the Explanation of Responses shows those details. You’ll see the statement, “Sale made pursuant to the Reporting Person’s approved 10b5-1 trading plan.”
This refers to rule 10b5-1 of the Securities Act, wherein an insider can sell stock by setting up a predetermined plan outlining a selling plan in advance of any company events, no matter what’s going on in the market. It helps insiders avoid instances of trading on material nonpublic information. It’s a frequent tool used by small and large companies to avoid scrutiny of illegal insider trading and is typically how notable insiders like Jeff Bezos, Mark Zuckerberg, and others sell stock. Therefore it isn’t regarded in terms of open market buying or selling.
List Of Penny Stocks To Watch
- Akebia Therapeutics Inc. (NASDAQ: AKBA)
- Ardelyx Inc. (NASDAQ: ARDX)
- Joby Aviation Inc. (NYSE: JOBY)
