Are These Penny Stocks A Buy Now? Here’s What Insiders Think
Since penny stocks are so cheap, traders tend to treat them more like lotto tickets than actual investments. Sure, they tend to present much more opportunity in the short term. But that doesn’t mean people aren’t investing in penny stocks or taking large positions in small companies.
Today we look at a handful of names experiencing significant insider trading activity. I don’t mean the type that involves Blue Horseshoe and Anacott Steel. I’m talking about the kind of insider buying that gets publicly reported.
In many cases, the average retail trader looks for news headlines for clues to a company’s outlook or progress. But the corporate filings – the ones that don’t get press – may get overlooked. Why would anyone pay attention to insider activity?
Depending on how shares are bought and sold, some presume insider trading indicates the sentiment of those running or deeply involved with companies. It might be management, beneficial owners, advisors, directors, or hedge funds. Read more about filings here: Penny Stocks & Due Diligence: Understanding Important SEC Filings.
There’s no “sure thing” that buying = prices will increase or selling = a sell-off is coming. However, it could give some clues as to how supportive (or not) insiders are of their companies. This list of penny stocks includes a few small companies turning heads in the stock market this month. The thing you need to decide is whether you agree with insiders or not.
Best Penny Stocks To Buy According To Insiders
- Charah Solutions, Inc. (NYSE: CHRA)
- TFF Pharmaceuticals, Inc. (NASDAQ: TFFP)
- Porch Group, Inc. (NASDAQ: PRCH)
- Venus Concept Inc. (NASDAQ: VERO)
Charah Solutions, Inc. (NYSE: CHRA)
There’s no secret that plenty of penny stocks are trading at low levels because they’ve gotten heavily sold in the market. Charah is one of these companies and the last few months saw shares drop from around $5 this summer to as low as $0.52 within the last week. Its latest earnings helped with the most recent dip below the $1 mark.
Charah reported an EPS miss but beat sales estimates. Despite this case, management appears optimistic about its outlook. CEO Jonathan Batarseh outlined several strategies this month. “With our newly fortified balance sheet, strengthened leadership, and expected growth in demand for our ESG solutions, Charah Solutions is positioned to grow…From mid-August through mid-November, we secured $42 million in new contract awards from new and existing customers.”
Even with suspended guidance, analysts remain optimistic. Stifel, for example, adjusted its price target to $2, which is still nearly 100% higher than current prices. The firm also kept its Buy rating. On top of that, insiders have begun scooping up shares of CHRA stock this month.
The latest string of purchases came from Director Robert Flexon and BCP Energy Services Fund. While Flexon’s purchase was for roughly $11,000, BCP came in much heavier, buying over $900,000 worth of CHRA stock. Average prices ranged from $0.62 and $1.03.
– 10 Top Penny Stocks With Unusual Options Activity, Time To Buy?
TFF Pharmaceuticals, Inc. (NASDAQ: TFFP)
This week has been an active one for TFF Pharmaceuticals. The move comes after the company announced a $10.675 million offering with proceeds earmarked for clinical trials, R&D, and working capital, among other things. With the offering closing this week, traders seem more optimistic now that the company has fresh capital and plans to deploy it.
TFF recently announced a positive proof of concept data from its TFF Voriconazole compassionate use program. CEO Glenn Mattes said in a November update, “In our view, Thin Film Freezing has the potential to become a cornerstone technology for delivering next-generation, dry powder therapeutics to patients more safely and accurately. We are encouraged by the results of the two recent TFF VORI compassionate use cases and look forward to additional data from our ongoing clinical programs and external collaborations.”
The company anticipates delivering preliminary patient data from the TFF VORI Phase 2 study next quarter. Other programs, including its TFF TAC clinical program, is expected to have data in the second quarter of next year.
This month, Director Aaron Fletcher snagged 43,470 shares of TFFP stock. This brought the total holdings to just under 800,000 in a trade worth nearly $50,000.
Porch Group, Inc. (NASDAQ: PRCH)
Porch has been a company that we’ve discussed over the last few weeks. Ironically, it was discussed specifically for insider activity. That action continued with Directors Rachel Lam, Davis Kell, and CEO Matt Ehrlichman buying over $500,000 worth of PRCH stock. The bulk of the buying was done by Ehrlichman, who purchased 256,949 shares at average prices in the range of $1.48 and $1.69 from November 18th through November 22nd.
The home services and insurance industry software company has experienced a jump in November thanks to several milestones, including naming a new CFO and authorizing a share buyback program for up to $15 million. Porch also outlined its guidance in light of recent real estate market activity.
“Due to the continued execution from our team, we are still tracking towards Adjusted EBITDA profitability in the second half of 2023, actively engaged in solutions to improve the capital efficiency and lower volatility at our insurance business, and are making progress on key initiatives to position us for continued strong growth anticipated throughout 2023,” explained CEO Matt Ehrlichman.
Another thing traders are accounting for is the PRCH stock short interest. According to Fintel.IO and TDAmeritrade, the current short float sits around 15%. It isn’t the highest short interest we’ve seen, but it is notable to some traders in the stock market today.
– Should You Be Buying Penny Stocks? Here’s 3 Reasons Why
Venus Concept Inc. (NASDAQ: VERO)
One of the cheapest names on this list of penny stocks to watch is Venus Concept. The trend among retail traders focusing on stocks under $1 has increased in popularity in November. VERO stock currently sits around $0.25, and the last few sessions have seen it rally back from recent 52-week lows. The company specializes in medical aesthetic technology for non- and minimally-invasive procedures, including hair restoration.
This month, a new private placement for $6.72 million has also brought in working capital. The company said it “provides Venus Concept with additional capital to advance our operating initiatives, key R&D priorities, and the ongoing comprehensive assessment of the Company, which is currently underway.”
CEO Rajiv De Silva also said, “We expect to commence implementation of the transformation plan resulting from the assessment during the first quarter of 2023. We intend to update the investment community on our progress as part of our fourth-quarter earnings call in March 2023.”
Insiders were active this month, with the company’s CEO, President, Global Sales President, and a Director scooping up VERO stock between $0.2 and $0.22. The largest purchase came from Mr. De Silva in a $250,000 buy at $0.20.
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