Penny stocks are generally thought of as a gamble. That is unless you ask experienced traders. For them, cheap stocks under $5 are opportunities for both short-term gain and long-term potential. On the one hand, we see daily occurrences of low-priced stocks exploding hundreds of percentage points.
On the other hand, a select group of companies goes on to become market leaders in their industries, trading at much higher prices. Determining which of the two sides of the coin a company is on is easier said than done, which is why penny stocks are great for traders and long-term investors.
In many cases, buying penny stocks is related more to mom-and-pop “main street” traders than to “smart money” Wall Street investors. However, SEC filings will argue the point. In this article, we’ll look at a few companies insiders are growing increasingly bullish on.
One in particular even saw an investment in the seven-figure range. Are they the best penny stocks to buy now, or are these investors simply exercising their “duty” to support the companies? I’ll let you decide. Let’s dive into this list of penny stocks to buy according to insiders.
Penny Stocks To Buy [According To Insiders]
- Essa Pharma Inc. (NASDAQ: EPIX)
- BitNile Holdings (NYSEAMERICAN: NILE)
- Bed Bath & Beyond (NASDAQ: BBBY)
Essa Pharma Inc. (NASDAQ: EPIX)
The most significant insider activity on this list of penny stocks is in Essa Pharma. One of the 10% owners of the company, Biotech Growth NV, snagged over 580,000 shares of EPIX stock at average prices ranging from $2.7921 to $3.1316. These purchases brought Biotech Growth’s total holdings to more than 5.5 million shares.
For those doing the math at home, the insider purchases were worth just over $1.72 million. These purchases were made just a few weeks after CEO David Parkinson grabbed roughly $14,000 more EPIX stock. Specifically, Parkinson purchased 4,887 shares at an average price of $2.958, bringing his total holdings to 32,108.
What does Essa Pharma Do? Essa is a pharmaceutical company developing prostate cancer treatments. Last month it reported positive results from an early-stage trial in its prospective therapy, EPI-7386.
What to watch with EPIX Stock? Based on these findings, Essa determined it fitting to begin a Phase 1b expansion study this summer and anticipates a Phase 2 testings comparing a combination of EPI-7386 and Bayer’s darolutamide cancer treatment before year-end.
BitNile Holdings (NYSEAMERICAN: NILE)
Thanks to the rise in cryptocurrency prices this week, related stocks are back in the spotlight. Bitcoin, Ethereum, and plenty of other cryptos surged ahead of the big Ethereum “merge” expected later this year. Ethereum Foundation member Tim Beiko said September 19th might be the official commencement date though no formalities were discussed. In a Tweet, Beiko said, “This merge timeline isn’t final, but it’s extremely exciting to see it coming together. Please regard this as a planning timeline and look out for official announcements!”
With crypto back on the radar, cryptocurrency-related stocks, including penny stocks, are gaining steam. BitNile is one of these companies and has also attracted attention from insiders. Executive Chairman Milton Ault III has been on a buying spree this month. With his latest Form 4 filings, Ault’s stake now totals more than 30 million shares. The Form filings also showed the latest purchase of 150,000 shares at an average price of $0.3267 per share.
What does BitNile Do? At heart, BitNile is a holding company specializing in disruptive technologies. In particular, its subsidiaries include data centers, bitcoin mining, and products that support defense, aerospace, industrial, telecom, and numerous other industries.
What to watch with NILE stock? Other than cryptocurrency, BitNile has operations in industries like green energy. This month the company announced that its TurnOnGreen business was awarded state, federal, and utility certifications for its electric vehicle chargers. With a renewed interest in EV stocks and cryptocurrency companies, BitNile has been one of the cheap penny stocks to watch this week.
Bed Bath & Beyond (NASDAQ: BBBY)
Meme stocks or “stonks” aren’t going away. They are here to stay, and the Reddit/Fintwit crowd seems to flock to these names at the first sight of momentum. As is the case, the action in the stock market today has placed a brighter spotlight on some of these companies. Bed Bath & Beyond is in the running. While insiders haven’t bought this week, July was a month that insider trading caught the market’s attention.
In early July, Directors and management built positions in BBBY stock. The most notable was from the interim CEO, Sue Gove. She grabbed a total of 50,000 shares at prices ranging from $4.43 to $4.94. This latest round of buying brought her total stake to 105,587.
What does Bed Bath & Beyond do? I’m sure most have heard of the company. It is a retailer of home goods and housewares selling to consumers via a brick & click model.
What to watch with BBBY stock? This week the company announced the launch of a curated furniture and decor collection with a celebrity couple, The Novogratz. Mara Sirhal, EVP and Chief Merchandising Officer at Bed Bath & Beyond, explained, “The Novogratz new collection offers unique items that we know our customers will love, while helping them transform their small living spaces into bespoke expressions of their personal lifestyle.”
Penny Stocks To Buy According To Insiders
Are penny stocks with insider buying worth looking into? For some traders, when management, large holders, and other insiders trade shares of the companies they’re involved with, it can send a message to the market. This sentiment-based action can have a direct impact on the market. Understanding how to read filings and translate information into useful data is also essential.
If you read the article Penny Stocks & Due Diligence: Understanding Important SEC Filings, you’ll better understand the different types of filings to look into. In particular, insiders file Form 4 more frequently than other filing types. In these cases, the footnotes will be a critical part of research as they can reveal the motive for selling or purchasing.
There are, of course, other ways to find penny stocks using fundamental analysis. But it is all based on your specific trading & investing style. Ultimately, insider trading is great to identify, but more research is recommended.