Penny stocks are typically sought after in hopes of discovering hidden potential. In this article, we look at recent insider buying and see if there are any current or upcoming events worth noting to prompt insider action. We explore the significant role insider activity plays in shaping market sentiment and piquing investor interest. Along the way, we’ll break down a list of penny stocks insiders are buying in May. This continues our list from the article 3 Hot Penny Stocks To Buy In May According To Insiders.
Penny Stocks & Insider Trading
How Insider Buying Influences Market Sentiment
Insider purchases can reflect a strong belief and confidence in the market. It can shape investor sentiment and influence the overall market outlook.
Aligned Interests: Where Executives and Shareholders Unite
When insiders are buying stocks that retail traders are watching, it can create a sense of synergy. It may also encourage strategic decision-making.
A Positive Outlook
There are favorable implications of insider buying. These insiders’ investments may signal their unwavering belief in a company’s growth prospects. This can create a ripple effect, generating an optimistic outlook that captures the attention of other investors.
It’s also worth noting that insider buying or selling doesn’t automatically signal stocks will rise or fall. Nor does it guarantee good or bad stock market news is on the horizon. But if sentiment-based research interests you, insider moves can influence certain choices depending on what is happening in the stock market today. Once you see what’s happening with some of these companies, you can decide if they deserve a place on your penny stocks watch list.
Penny Stocks to Watch
OmniAb Inc. (OABI)
Since the beginning of May, shares of OmniAb stock have been in rally mode. This week took the penny stock back to levels around the $4 mark, an area not seen since mid-April. OmniAb is a biotech company that offers screening technologies for discovering new therapeutics. Its Biological Intelligence of transgenic animals has been modified to generate antibodies with human sequences. They can provide a way to develop human therapeutic candidates.
This month the company’s leadership has been on the presentation circuit. Earlier in May included presentations at the HC Wainwright and EF Hutton conferences. Next week OmniAb will be at Benchamrk’s and B. Riley’s investor conferences and Craig Hallum’s Institutional Investor conference on May 31st.
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CEO Matt Foehr explained the company’s directives in a recent quarterly update. “Innovating our technologies is part of our strategy, and we are proud to introduce OmniDeep™ at next week’s PEGS Protein Engineering Conference and Expo in Boston. OmniDeep is a suite of proprietary in silico tools that have been a part of our internal research efforts for many years and that we’ve recently expanded. These tools are now more broadly available to our partners and facilitate rapid identification of lead candidates leveraging our large multi-species antibody databases and the Biological Intelligence™ of our proprietary transgenic animals.”
Foehr also picked up a few hundred thousand shares of OABI stock recently. In a Form 4 filing, he reported buying 440,000 shares at an average price of $3.40.
Sonder Holdings Inc. (SOND)
Like most companies, Sonder reported its latest quarterly financial results in May. The hospitality company leverages technology to provide various accommodation options, including large rooms to spacious apartments.
Last quarter, Sonder missed earnings per share estimates but beat sales expectations by a wider margin. It recorded over $120 million in revenue, a 50% increase from its 2022 Q1 sales.
CEO Francis Davidson also discussed the latest performance and additional expectations for the year ahead, “In Q1, we improved free cash flow¹ by $21M y/y. This is far better than the average $15M reduction we saw in the 3 quarters since we announced our shift from hypergrowth to cash flow positivity. Yet because travel is weakest in Q1, FCF came in at $(41)M. We anticipate this number to be a lot better in Q2, and even better in the 2nd half of 2023.”
The company gave updated guidance in its Q1 investor letter:
“For the second half of 2023, we expect revenue between $345 million and $375 million, which at the mid-point of the guidance ranges provided, translates to approximately 40% year-over-year growth for the full year of 2023.”
CFO Dominique Bourgault is the most recent insider purchase reported. On May 15, 100,000 shares were bought at an average price of $0.32.
Getaround Inc. (GETR)
Getaround, a carsharing marketplace, has been in the news following recent M&A activity. The company announced the acquisition of a once-popular penny stock, HyreCar. Last week Getaround reported plans to acquire the company to speed up its profitability path and shore up its worldwide gig carsharing industry position. According to Getaround, the company anticipates this deal to contribute $75 million of run-rate annualized gross booking value. It also expects it to contribute to a positive adjusted EBITDA.
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“This transaction unites two pioneering companies in the carsharing space. More than just sound economics for Getaround on our path to profitability, acquiring substantially all of the HyreCar assets will strengthen the business,” said Sam Zaid, CEO and Founder of Getaround.
But it may not be the only thing traders are looking at right now. A recently filed Schedule 13D showed an increased stake by one of the company’s largest investors. Mudrick Capital’s filing shows a stake of more than 26.26 million shares, roughly 22% of the company’s shares.
According to the filing, “The Reporting Persons are filing this statement on Schedule 13D as a result of their beneficial ownership of Issuer Securities (as defined herein) exceeding 20% of the Issuer’s outstanding Common Stock as of May 4, 2023, following the issuance of the Warrants as described in Item 6 of this Schedule 13D. The Reporting Persons previously reported their beneficial ownership of Issuer Securities on a Schedule 13G, filed on December 19, 2022.”
Globalstar Inc. (GSAT)
Since May 2nd, Globalstar has seen its share price rise from $0.85 to over $1 as the company reported better earnings and sales growth over the last year. It saw operating income jump over 150% and a more than 80% reduction in GAAP net loss. The company offers satellite and terrestrial connectivity services to consumers, businesses, and government agencies.
CEO Dave Kagan noted in Globalstar’s first quarter update, “We are poised to deliver sustainable revenue growth throughout 2023. Notably, Adjusted EBITDA increased over 200% with a healthy margin of 56%, up from 31% over the prior year’s quarter…In addition to record financial growth and as highlighted in this release, we continue to execute along our four pillars – wholesale, legacy, IoT, and terrestrial spectrum – which together make Globalstar a disruptive player in our industry.”
Director and 10% owner James Monroe III reported purchasing more than 5 million shares this month through his Thermo Properties II, LLC. The purchases totaled more than $5.1 million at average prices ranging from $0.93 to $1.02.
List Of Penny Stocks
- OmniAb Inc. (NASDAQ: OABI)
- Sonder Holdings Inc. (NASDAQ: SOND)
- Getaround Inc. (NYSE: GETR)
- Globalstar Inc. (NYSEAMERICAN: GSAT)
- Telos Corporation (NASDAQ: TLS)
- Latham Group Inc. (NASDAQ: SWIM)
- Esperion Therapeutics (NASDAQ: ESPR)