Are you searching for promising penny stocks to invest in? Paying attention to insider activity can be a valuable way to gauge a company’s potential. Insiders, such as the CEO or other executives, have access to certain information about a company’s financial health and plans. So when they buy shares, it can become a signal to the market and sway sentiment.
It’s good to note that insider buying does not guarantee that the stock price will rise. Various external factors can impact the stock’s performance. On the other hand, if insiders are selling shares, it could indicate a lack of confidence in the company’s future prospects, leading to a drop in stock price.
Therefore, monitoring both insider buying and selling is critical. Tracking insider activity can provide valuable insights when making your list of penny stocks to watch.
Use Insider Activity to Find Potential Penny Stocks
When researching penny stocks to buy, it’s important to conduct thorough due diligence. Do not solely rely on insider activity. You should also examine financial statements, industry trends, and the company’s performance compared to its competitors.
While insider trading is just one factor to consider when investing in penny stocks, it’s valuable to know when company management or larger investors are adding shares. This article examines several penny stocks that have received attention from insiders this quarter and some with multi-million dollar bets.
Bark Inc. (BARK)
Bark is one of the popular “household stocks” that has become a penny stock over the last two years. In fact, when it made its public debut in 2020, BARK stock traded as high as $19.54. Now that it’s hovering around $1.50, a new group of traders seems to be paying more attention to the company.
For those unfamiliar, Bark is the pet marketing company behind products like BarkBox. This is the subscription service specifically for man’s best friend. However, the financials have caused investors to bark and bite in the market in the form of selling pressure. The company’s stock continued to slump after reporting the latest fiscal Q3 2023 earnings. Bark’s EPS was in line with estimates, and the company narrowly beat on sales figures.
Regardless, management appears optimistic. Matt Meeker, Co-Founder, and Chief Executive Officer, explained, “The third quarter highlighted the significant progress we have made executing against the strategic initiatives that we laid out at the beginning of the fiscal year. Our average order value is growing at the accelerated pace we anticipated, and we delivered the strongest gross margin quarter since going public—even with all of the heavy holiday promotions—and we anticipate further improvements ahead.”
Insiders have begun buying BARK stock in 2023. The first to break the ice was Zahir Ibrahim. The Bark CFO purchased 100,000 shares at an average price of $1.55 this week.
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Diebold Nixdorf (DBD)
Shares of Diebold Nixdorf hit new 2023 highs this week and blew through its 200-day moving average. One of the biggest catalysts for the tech company came late last week. Diebold announced that it began an exchange offer regarding specific senior notes.
Diebold Nixdorf focuses on connected commerce for eCommerce and banking. It provides retail systems, self-ordering kiosks, point-of-sale systems, and ATMs and works with some of the larger petroleum companies. Why is DBD stock on the watch list right now?
No further updates have come out, but there was motion in the company’s filings. Company President & CEO Octavio Marquez and Director Gary Greenfield submitted Form 4s showing the combined purchase of over $100,000 worth of DBD stock. Average prices ranged between $2.28 and $2.92.
Applied Digital Corporation (APLD)
Shares of cryptocurrency and blockchain technology-related companies have been turning heads this year. The moves come as the price of Bitcoin, Ethereum, and other digital currencies rebound from last year’s sell-off. Applied Digital specializes in digital infrastructure for high-performance computing. The company recently beat earnings and sales for the second quarter of their fiscal 2023 calendar, with momentum building since.
Applied Digital Chairman and CEO Wes Cummins explained in its quarterly update: “In parallel with our newer strategic objectives, we continued to progress our next two data centers, Garden City and Ellendale, both of which we anticipate to begin energizing by the end of February. Once fully online, we will have nearly 500MW of hosting capacity that we expect will put us at an annualized adjusted EBITDA run rate of approximately $100 million. The fact that we are accomplishing this in one of the most challenging cryptocurrency market cycles is a testament to our differentiated business model and operational execution.”
CEO Wes Cummins has been an active buyer of APLD stock for months. His latest string of trading saw the executive purchase over 100,000 shares of company stock at average prices ranging between $3.02 and $3.41.
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Porch Group, Inc. (PRCH)
Shares of Porch Group have been on the radar since late last year. One of the catalysts at the time coincidentally was insider trading activity. Directors Rachel Lam, Davis Kell, and CEO Matt Ehrlichman bought 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 seen a steady rise in share price during the months that followed, and the trend continues in the stock market today. PRCH stock retested levels within striking distance of 2023 highs. With more optimism returning to the real estate market, some are searching for stocks with exposure to the trend.
Porch Group offers software and services to home inspectors, moving companies, agencies, utility companies, and others and generates revenue from fees received for connecting them with homeowners. In the last quarterly update, CEO Matt Ehrlichman explained, “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.”
With that outlook, other insiders are following in the footsteps of Ehrlichman’s flurry of buying. This week Park West Asset Management, a 10% owner of the company, reported the purchase of more than 2.17 million shares of PRCH stock. Trades were made at average prices from $2.21 to $2.785, with a value north of $5 million.
Another real estate-related penny stock to watch is Vacasa. The company has been very quiet over the last few months, yet recovery and reopening in the economy and real estate market haven’t seemed to hurt VCSA stock. The company offers a vacation rental management platform in North America, offering access to over 35,000 homes. It provides professionally managed inventory to notable companies, including AirBnB, Booking, and VRBO.
The last few sessions have seen an uptick in activity in VCSA stock, and a recent 13G filing reveals a bit more information. Adams Street Partners and TPG GP filed amended schedule 13Gs this week, showing stakes ranging between 4.92% and 8%.
List Of Penny Stocks To Watch
- Bark Inc. (NYSE: BARK)
- Diebold Nixdorf (NYSE: DBD)
- Applied Digital Corporation (NASDAQ: APLD)
- Porch Group, Inc. (NASDAQ: PRCH)
- Vacasa (NASDAQ: VCSA)