Are insiders something that you follow in the market when it comes to penny stocks? Some consider this strategy “following the money” and has lead to a new trend among retail traders. Mimicking the actions of larger investors is something that has been around for decades. But its prevalence has become more apparent in recent months thanks to new retail traders looking for the edge.
You could follow things like meme stocks or penny stocks to buy according to analyst ratings. But in both cases, they’re missing a critical component. That component is support from the companies themselves. I’m not talking about more financing or reaching corporate milestones but actual “skin in the game,” so to speak. Insider trading is something that usually gives an added layer of sentiment to a company’s public perception. When insiders buy, the market generally takes this as a positive sign.
When it comes to insiders selling, well, that’s usually seen as a negative. There are some exceptions to the rule. Executives and other insiders may put themselves on buying or selling schedules. One example of this is the periodic stock sales in Amazon (NASDAQ:AMZN) by CEO Jeff Bezos. Does anyone need to sell $3 billion worth of stock? Not really, but Bezos has a preset selling schedule that he is not in control of to avoid conflicts of interest. All the same, it was a rescheduled event and, thus, doesn’t tend to hold as much weight as far as market sentiment is concerned.
Read more: How To Buy Penny StocksPenny Stocks To Buy According To Insiders
In this article, we’ll take a closer look at a few penny stocks insiders are scooping up this month. Then you can decide if it’s worth taking a closer look before October or if you should avoid them entirely.
- Tuesday Morning (NASDAQ:TUEM)
- NGL Energy Partners (NYSE:NGL)
- Athenex (NASDAQ:ATNX)
- 9 Meters Biopharma Inc. (NASDAQ:NMTR)
- Hall of Fame Resort & Entertainment Company (NASDAQ:HOFV)
I can’t say that it’s been a strong month for Tuesday Morning. However, it would appear that insiders see this as an opportunity. This week a slew of Form 4s were filed, showing that management is buying shares of TUEM stock at these levels. In total, its CEO, COO, and CMO purchased more than 760,000 shares between average prices of $1.68 and $1.81. You’ll also see that there were additional shares accounted for on the Form 4s of COO Marc Katz and CMO Paul Metcalf. These were restricted stock units that vest during certain periods of their employment provided certain thresholds. Needless to say, even at the lower end of this range, that’s more than $1.2 million.Recent TUEM Stock News
Tuesday Morning continues licking its wounds following an earnings miss in its Q4 report. However, the company managed to beat sales estimates. If you have followed Tuesday Morning in the past, you know that it recently emerged out of bankruptcy, which was sparked by the 2020 pandemic shutdown. Now, in 2021, the company has focused its efforts on a full reboot.
WIth reopening efforts continuing, retail stocks remain a focus for some traders. Tuesday Morning specializes in off-price retail in name-brand products for the home. A surge in home sales, new builds, and the like have also brought some speculation to names within this retail niche. According to the company, its first-quarter fiscal 2022 comparable store sales are up low single digits quarter-to-date compared to the similar period in fiscal 2020. It also expects to report an Adjusted EBITDA loss for fiscal 2022. This is slightly improved from fiscal 2021, based on headwinds from the industry-wide supply chain issues.
Regardless, it appears that the market has reacted favorably to the insider activity so far. Will TUEM stock be able to recover what it lost after this last round of earnings?2. NGL Energy Partners (NYSE:NGL)
On the same side of the coin, NGL Energy has been in recovery mode as well. Since hitting lows last month of $1.38, a miss of market momentum and excitement within the energy sector has helped give NGL stock a boost back above $1.90. The latest Form 4 from this week adds to a series of insider disclosures over the last few months. This time, CEO Michael Krimbill reported buying 100,000 shares of NGL stock at an average price of $1.735 or $173,500 worth. This brought his total direct holding in the company to more than 2.12 million shares.Click To See NGL Stock Trades From InsidersRecent NGL Stock News
As you may or may not know, recovery efforts from the pandemic continue pushing volatile trading in energy stocks. However, the latest bought has brought a bullish tone to the market. NGL Energy provides logistics services for crude oil and natural gas products. One of the main revenue drivers for the company is its water s solutions segment. It helped saw strong EBITDA growth during the last quarter. However, crude and liquids logistics remain impacted by supply chain disruptions and increases in inventories as a result.
“We expect to see improved results going forward due to embedded, unrealized gains in our inventory, with the annual result being in line with the low end of our original expectations for the fiscal year,” stated Mike Krimbill, NGL’s CEO, in a recent earnings update. With a bright outlook and hopeful expectations on further reopening, energy sector stocks remain a focus for traders. Following this latest bit of upbeat sentiment from insiders, NGL stock has become one of the names to know in September.3. Athenex (NASDAQ:ATNX)
Shares of Athenex continue attempts to break above major technical levels. In this case, its 50-day moving average has persisted as a significant level of resistance over the last seven months. There was a brief stint in early summer that it traded slightly above this level but nothing that was able to hold.
Athenex has focused on a reboot of its own this year. In February, ATNX stock plummeted from over $11 to as low as $3.12 last month. The main culprit was a complete response letter from the FDA for Athenex’s oral paclitaxel plus encequidar treatment for metastatic breast cancer.
Fast-forward to now, and Athenex remains focused on its recovery. This week’s Form 4 filing from Director Jinn Wu is the latest in a string of insider activity that picked up in August. Wu picked up 50,000 shares of ATNX stock at an average price of $3.22 or roughly $161,000 worth.Click To See ATNX Stock Trades From InsidersRecent ATNX Stock News
This week more news came out of the company relating to itspaclitaxel platform. Athenex presented data from a Phase 1 study of paclitaxel combined with pembrolizumab at the European Society for Medical Oncology conference.
“The encouraging interim Phase 1 data suggest promising anti-cancer activity and expected safety and tolerability observations for oral paclitaxel with pembrolizumab in lung cancer patients who had progressed on PD1/PDL1 therapies…PD1/PDL1 therapies are important treatments for lung cancer but most patients eventually progress, and those patients represent an area of high unmet medical need. We are currently working to confirm these data in the dose expansion phase of this study.”Dr. Rudolf Kwan, Chief Medical Officer of Athenex
With this latest update and optimism from insiders, the market has noticed that ATNX stock makes its latest attempt at testing the 50-day moving average.4. 9 Meters Biopharma Inc. (NASDAQ:NMTR)
Though it’s seen lighter trading volumes than other names on this list of penny stocks, 9Meters has gained ground in September. Similar to other companies, this week’s insider filing adds to a growing list of previous trades. In September, Director Mark Sirgo and CFO Edward Sitar purchased a total of 88,529 between average prices of $1.22 and $1.36. Sirgo accounted for the bulk of that, with over 73,000 shares purchased at an average price of $1.36, bringing his directly controlled position to over 1.1 million shares.Click To See NMTR Stock Trades From InsidersRecent NMTR Stock News
As another biotech company, traders are focused on 9 Meters’ pipeline developments. In August, the company announced a collaboration with EBRIS Foundation for a planned Phase 2 study of its multisystem inflammatory syndrome treatment in children, resulting from COVID-19 (MIS-C), larazotide. Translational evidence reported previously in Journal of Clinical Investigation detailing larazotide’s mechanism in addressing MIS-C.
This month, 9 Meters presented at the HC Wainwright Investment conference. Next week could be an important one for the company as well. Management presents at the Oppenheimer Healthcare Life Sciences & MedTech Summit.5. Hall of Fame Resort & Entertainment Company (NASDAQ:HOFV)
Waitr Holdings was a big winner earlier this year. Thanks to a mix of reopening interest focused on the upcoming NFL season and the company’s involvement in the non-fungible token space, HOFV stock has been a point of focus for many retail traders. Despite the overall bearish trend since June, the day-to-day volatility has helped keep the market’s interest. The latest event is fresh as of this article. A new Form 4 was just filed showing company CEO Mike Crawford picked up 20,100 shares of HOFV stock at an average price of $2.81.Click To See HOFV Stock Trades From InsidersRecent HOFV Stock News
While HOFV has gotten wrapped into the growing list of NFT penny stocks, recent news has highlighted the company’s other side. The company has a partnership with the Pro Football Hall of Fame. Its Hall of Fame Village, powered by Johnson Controls, is home to multi-use sports, media, and entertainment facilities. Most recently, the company announced that The Brew Kettle Brewery and Restaurant would open at the site.
“Our guests will now have yet another excellent dining and beverage option when they visit, whether it’s for one of our sporting or concert events or just leisurely enjoying all the Destination has to offer. We look forward to a long and mutually beneficial relationship that will offer our guests a wide variety of craft beers, high-quality food, and fantastic entertainment from one of Ohio’s best franchises,” said CEO Mike Levy.
This news follows another update in September that saw the Women’s Football Association partnering with Hall of Fame and the NFL Alumni Academy. The WFA said it would elect six players and/or coaches to train under NFL Alumni Academy coaches for a two-week internship as they prepare the top free-agent football players for an NFL team.Are These Penny Stocks A Buy?
Clearly, there are many things to factor into your trading strategy. However, insider activity can play a part. In this article, we discussed 5 penny stocks that insiders were compelled to buy. Let us know what you think. Do you agree with their sentiment, or do you think these should be avoided at all costs?