What Are The Best Penny Stocks To Buy Right Now?
Do you want to find the best penny stocks to buy this month? That might be a loaded question, and I’ll explain why. It depends on your trading style and approach to the stock market today. Are you looking to capitalize on short-term spikes in share price?
On the other hand, maybe you’re looking for penny stocks to buy based on above-average trading volume. You could also be someone who’s looking for penny stocks to invest in or swing trade. Of course, there are plenty more styles of trading that all make the answer to my question that much more complicated.
When you talk about “the best,” it comes down to the best for your strategy. Today we look at a few penny stocks that “follow the money” traders are hunting for. This isn’t a new trend but more of a new “title” when looking for stocks that insiders and institutions are buying up. When it comes to “how” you follow the money, the approach is simple. You first begin by going to SEC filings to see if any documents show buying activity. If you’re new to the “Follow The Money Strategy,” you might want to know precisely which filings are necessary to sift for.
“Follow The Money Strategy” Breakdown
The easiest way to find big-money bets on penny stocks (or stocks, in general) is to look at the SEC filings. Here are a few of the most frequently referenced when it comes to these types of transactions:
Form 4 Filing
According to the Securities And Exchange Commission, Form 4 is a “statement of changes in beneficial ownership.”
It must get filed with the commission whenever a material change happens in the holdings of a company’s insiders.
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 anyone who shares voting or investment power directly or indirectly (the power to sell the security).”
These filings would be highlighted by traders looking for “Whale” trades as they generally connect to significant funds or investment trusts.
- A Schedule 13D gets filed by an “active investor” who owns 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.
- 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.
Read more about filings here: Penny Stocks & Due Diligence: Understanding Important SEC Filings.
Penny Stocks To Buy According To Insiders
In this article, we look at penny stocks to buy according to recent purchases from insiders. While no single indicator or alternative data should be the sole reason to add something to your watch list, knowing is half the battle, as they say.
Ftc Solar, Inc. (FTCI)
The solar industry in 2022 has been a bit more volatile this year but not to the extent of 2021. You might remember companies like Sunworks (NASDAQ: SUNW) and RenaSola (NYSE: SOL) exploded in January but completely fell apart through the end of the year. This year has been much more choppy overall, with most solar stocks trading sideways through the end of the year.
Is this a bad thing? Not necessarily if you know how to take advantage of range-bound stocks. Nevertheless, other companies, including FTC Solar, haven’t exactly followed suit. FTC has continued weathering a garage of selling pressure that began almost as soon as the FTCI stock IPO. It debuted at $13, saw a high of over $15.40, and the rest is history. But heading into 2023, FTCI stock seems to have begun rebounding.
Since dipping to 52-week lows in November, the solar penny stock managed to bounce back. One of the most significant catalysts was the FTC Q3 earnings results. Its outlook heading into next year caught the market’s attention. Management expects to record continued, sequential revenue improvement. Meanwhile, FTC explained that its total backlog continued growing and is approaching the $1 billion mark at $961 million.
If you look at the FTCI stock filings, you’ll probably notice an incredible amount of insider selling this year. However, the most recent Form 4 from 10% owner South Cone Investments Limited Partnership shows some new buying. The firm grabbed over 78,000 shares of FTCI stock at an average price of $2.32 per share in purchases totaling more than $180,000 this month.
Eterna Therapeutics Inc. (ERNA)
It’s been a busy month for insiders in Eterna Therapeutics. The recently IPOd biotech company has managed to reclaim some of what it has lost since its public debut earlier this year. Eterna specializes in cell engineering and has the technology to develop transformational medicines with an in-licensed portfolio of more than 100 patents.
This quarter the company announced a research collaboration to develop advanced gene-edited iPS cell therapies. The agreement with Michael Andreeff, M.D., Ph.D., and professor of Leukemia at UT MD Anderson Cancer Center, will evaluate the capacity of Eterna’s therapeutic candidates. Matt Angel, Ph.D., Interim Chief Executive Officer of Eterna, explained, “This work has the potential to accelerate and expand the applications of the allogeneic cell therapy platform that we obtained last year through our acquisition of Novellus Therapeutics.”
A surge of momentum this week helped give ERNA stock a kick in the pants. This was thanks, in part, to insider activity in the penny stock. Directors Nicholas Singer, Charles Cherington, and 10% owner John Halpern purchased millions of dollars (combined) of ERNA stock. The largest came from John Halpern.
Cronos Group Inc. (CRON)
Another penny stock taking off after insider activity is Cronos Group. The company is a cannabis company that, like most others, recently experienced a rip-and-dip move in the stock market. Much of the latest attention was on pending legislation that faced some hurdles. Reports suggested that marijuana banking reform may not become a reality in the near term. This was due to arguments over the related defense bill, causing some delay in its consideration.
Whether or not that gets ironed out sooner than later is to be seen. However, it hasn’t stopped Cronos from executing its business model. This week, the company unveiled its newest CBC product. The Spinach FEELZ™ THC+CBC Day Trip Mango Lime gummies use Ginkgo Bioworks’ (NYSE: DNA) platform for organism design and development. We’ve discussed DNA stock plenty over the last few weeks, as it’s typically mentioned along with biotechnology stocks. In this case, there’s a different twist to its platform.
In this light, the new gummies, according to Cronos, are the first CBC gummy product in Canada and the first of its kind to feature a 3:1 ratio of CBC to THC. Cannabichromene, or CBC, has been discussed as a non-psychoactive cannabinoid that promotes anti-inflammatory issues.
You may recall CRON stock on a list of penny stocks insiders were buying last month. That trend continued in December. The latest purchase comes from the same person doing the buying in November, Jason Adler. He sits on the Cronos board and has reported new purchases via his Gotham Green Fund III this week. Adler snagged another 156,000 shares total, worth over $460,000 based on an average price of $2.96.