What Are Penny Stocks?
Penny stocks are usually stocks of small companies that trade below $5 per share. Many penny stocks are listed on major exchanges like the NYSE and Nasdaq. However, most of them are traded over the counter via the OTC Bulletin Board (OTCBB). They also have prices as low as $0.0001.
How to Find Penny Stocks to Buy
If you’re eager to learn how to find penny stocks to buy, we’re here to help. Discovering the perfect stocks requires a strategic approach that balances risk and potential rewards. To kick off your search, start with comprehensive research using specialized stock screeners and financial websites catering to penny stocks like PennyStocks.com.
Look to identify companies with promising growth prospects and favorable industry trends. You might also want to consider tapping into resources like social media platforms and online investment communities to get a feel for where the focus of retail traders could be headed. Remember to exercise caution and assess each investment before making a decision.
Insider Trading & Penny Stocks
Investors often find themselves intrigued by penny stocks that have recently witnessed insider buying, and for a good reason. Insider buying occurs when executives, directors, or individuals with inside knowledge of a company decide to purchase shares of their company’s stock.
This activity holds significance and can potentially serve as a positive signal for the company’s future. Let’s explore a few key reasons why investors pay attention to penny stocks with recent insider buying:
When insiders invest their money in the company’s stock, it reflects confidence in its potential. Their purchases indicate a belief in the company’s growth prospects and success. As a result, investors view this as a positive indication. It can have a favorable impact on market sentiment.
Insider buying aligns the interests of company insiders with those of external shareholders. By purchasing shares, executives and directors share in the risks and rewards of the company’s performance. This alignment suggests that insiders are motivated to make strategic decisions that benefit all shareholders, aiming to maximize shareholder value.
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Publicly Available Information
Insider buying is typically based on publicly available information, as insiders are prohibited from trading on privileged, non-public information. Therefore, their decision to buy shares can be seen as a positive outlook for the company’s future. Investors interpret this as a signal of insiders’ optimism about the company’s prospects.
Market Perception and Interest
When news of insider buying spreads, it tends to generate positive market perception and draw attention from other investors. The insider purchases create a sense of optimism and may lead other investors to believe there is hidden value or positive developments on the horizon. Consequently, it can spark further investigation and consideration from potential investors.
Conducting thorough research, considering other fundamental factors, and evaluating market conditions are equally important. Furthermore, it is worth recognizing that insider buying does not always guarantee future success, as insiders may have personal reasons for their purchases.
This article looks at a handful of hot penny stocks with insider buying as part of their May investments strategy. Then you can determine if they deserve a place on your watch list.
Penny Stocks To Buy According To Insiders
Telos Corporation (TLS)
You might suspect that tech stocks are out of favor with investors. However, a mix of attention in artificial intelligence and cyber security has recently piqued interest in the second quarter. Telos Corp. is an example, as shares have climbed higher since the beginning of May.
The company specializes in cloud and enterprise security solutions. Recent earnings results have helped spark some optimism as well. Telos reported over $35 million in revenue for the quarter. While this missed estimates, reaffirmed guidance has helped prompt some bullishness recently.
“All metrics exceeded the high end of our guidance range,” said John B. Wood, Telos chairman and CEO. “As expected, our first quarter results reflect lower revenues on large programs.”
Telos reiterated 2023 revenue of $115 million – $140 million compared to the $127.15 million consensus. Adding to the interest from the market is insider activity in the penny stock.
Several directors and the company’s CEO, John Wood, picked up hundreds of thousands of shares of TLS stock this month. The most significant purchase was from Wood, who nabbed 400,000 shares at average prices between $2.12 and $2.45.
Latham Group Inc. (SWIM)
With summer months underway, outdoor activity stocks have gained some speculative interest. Even with the stock market down this month, shares of several leisure companies are trading higher. Latham Group designs manufactures, and markets in-ground residential pools. It also reported its latest round of earnings last week. Despite missing earnings per share expectations, the company beat sales estimates by a wider margin.
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CEO Scott Rajeski explained, “Our operational execution enabled us to deliver first-quarter results above our expectations in spite of the continued challenging macroenvironment and a difficult year-over-year comparison…We continue to make progress in driving material conversion from concrete to fiberglass swimming pools. In 2022, we grew fiberglass pool volumes in a down U.S. in-ground pool installation market, and we expect that continued momentum in fiberglass will position us to outperform the market again this year.”
Despite some negative blowback from analysts, insiders appear to have taken a different stance. Company director James Cline recently picked up 50,000 shares of SWIM stock. Average purchase prices ranged from $3.20 to $3.60.
Esperion Therapeutics (ESPR)
Biotech penny stocks have been hot lately and most likely due to their speculative nature. Generally speaking, cheap stocks are followed for their potential to break out quickly. When you look at biotech stocks, they can present unique situations for sporadic, company-centric catalysts. In this case, Esperion has seen a noticeable uptick in directional momentum, with shares climbing for the last few weeks.
The company’s net product revenue growth from the first quarter results seems to have helped perk up some interest in the penny stock. In its latest round of earnings, Esperion also discussed “clinically meaningful results” from its CLEAR Outcomes trial. CEO Sheldon Koenig highlighted the latest company milestones, stating the company has seen “significant public interest and enthusiasm for bempedoic acid, garnering over one billion total impressions from multiple print media and broadcast outlets in the U.S.”
Koenig continued, “We are already witnessing rapid adoption in demand for this practice-changing treatment from prescribers and pharmacists. International Lipid Expert Panel guidelines now recommend bempedoic acid ahead of PCSK9 inhibitors, and we anticipate more guideline updates in the future. We remain on track to submit regulatory filings in both the U.S. and Europe in the first half of 2023.”
Koenig and two company directors participated in a buying spree of ESPR stock this month. Collectively, the three purchased nearly 60,000 shares at average prices between $1.2596 and $1.5714. The most notable purchase came from director Martin Carroll.
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List Of Penny Stocks
- Telos Corporation (NASDAQ: TLS)
- Latham Group Inc. (NASDAQ: SWIM)
- Esperion Therapeutics (NASDAQ: ESPR)