Are you looking for penny stocks to buy now? You’re not alone, and some traders push Reddit stocks aside for something else. They’re putting together their list of penny stocks based on “following” the money. This strategy is simple, has plenty of speculative bits, and has played out through interesting scenarios for traders. I say “interesting” because following the money doesn’t always mean a yellow brick road to profits.
Sometimes it doesn’t mean anything at all. However, that doesn’t shut down the idea itself, where traders presume insider activity could be a “clue” of what’s to come. Are insiders buying? That could mean an optimistic outlook because “someone knows something” that the public doesn’t. The same sentiment holds for the opposite end of the spectrum when there’s insider selling.
In this article, we look at penny stocks to buy according to insiders.
- Standard Biotools Inc. (NASDAQ: LAB)
- Atai Life Sciences (NASDAQ: ATAI)
- Retractable Technologies (NYSE: RVP)
- Limelight Networks (NASDAQ: LLNW)
Best Penny Stocks To Buy
First thing’s first – how do you find insider trading? It’s not as complicated as you might think. Whenever there is insider activity, it must be published via a filing with the SEC. Insiders and large shareholders file Form 4s, Schedule 13s, and other filing types to show different information. In the case of Form 4, you’ll see when trades were conducted, at what price, and, most importantly, any related notes to go with the transactions. This part is essential. For example, when you hear about Jeff Bezos selling shares of AMZN stock, it isn’t necessarily because he’s heading for the hill in fear the company will fail.
A 10b5-1 plan allows insiders to sell a set number of shares at a predetermined time. This helps them avoid any type of accusal of insider trading. You’ll see management of larger companies sell under a 10b5, including Jeff Bezos, Mark Zuckerberg, and many others. This is important to note as the timing of the selling may not necessarily coincide with how a stock is performing. On the flip side, people like Elon Musk have, in fact, made unplanned sales and purchases of stocks like TSLA and TWTR. This is likely why you see much more volatile action around the timing of these filings than when Bezos or Zuckerberg made their filings. Now, let’s look at a handful of penny stocks insiders are buying right now. Are they on your list of penny stocks to watch in May?
1. Standard Biotools Inc. (NASDAQ: LAB)
Standard Biotools is the new name for a prior penny stock that was popular, Fluidigm. The company completed a quarter-billion-dollar capital infusion and rebranded earlier this quarter. Standard Biotools is developing a portfolio of technologies to aid in biomedical research. The goal is to help researchers develop medicines faster and “better,” as they put it.
Who’s Buying LAB Stock?
In a recent Form 4 submitted by Caligan Partners LP (a 10% owner), the firm picked up 400,000 shares of LAB stock. According to trade notes, average prices range between $2.37 and $2.89.
2. Atai Life Sciences (NASDAQ: ATAI)
Psychedelic stocks haven’t been in favor of the market. This has gone hand-in-hand with other niches like cannabis stocks. However, that hasn’t brought pause to insiders taking advantage of depressed pricing, and Peter Thiel-backed Atai Life Sciences has come into the spotlight recently because of it. It isn’t about “eating mushrooms, man,” Atai focuses on mental health disorders and possible therapies to treat them. Its model utilizes technology and psychedelic medicine combined with other drugs to create new drugs to treat mental health disorders.
Who’s Buying ATAI Stock?
Like LAB stock, another 10% owner of ATAI stock is doing the buying recently. Apeiron Investment Group Ltd. reported purchasing more than 50,000 shares at the end of April. According to filing notes, average prices ranged between $4.22 and $4.66. This brought the group’s indirect share ownership to just under 1.8 million shares of ATAI stock. Recent comments from Tesla CEO Elon Musk related to psychedelic medicine have also brought favor to certain psychedelic stocks. Musk said in a Twitter conversation that he’s “talked to many more people who were helped by psychedelics & ketamine than SSRIs & amphetamines.”
Meanwhile, ATAI is among the growing list of Cathie Wood stocks to watch. The high-growth-focused ARK Investment has been building exposure to ATAI.
3. Retractable Technologies (NYSE: RVP)
Medical technology stocks have come back into the spotlight despite the stock market meltdown. Retractable Technologies has followed the slight bull trend, and thanks to insider buying, upbeat sentiment has begun creating some buzz. The company manufactures its VanishPoint, EasyPoint, and Patient Safe medical products.
Who’s Buying RVP Stock?
The last four trading days have been some of the most bullish RVP stock has seen in months. This uptick came after shares slowly slid from over $10 to as low as $3.28 this quarter. However, the latest round of insider buying from 10% owner Braden Leonard has become positive by looking at the chart. Leonard purchased 430,000 shares of RVP stock. Filing notes show these purchases were made between April 28th and May 2nd at prices ranging from $3.38 to $3.95. These trades were worth more than $1.6 million for those of you doing the math.
4. Limelight Networks (NASDAQ: LLNW)
Tech has received the brunt of the latest stock market sell-off. In looking at the Nasdaq specifically, we could say that it has crashed based on the drop of more than 20% this year alone. If we went back to the recent all-time highs in November 2021, that drop is even more significant. It was only recently that LLNW stock reflected the bearish trend, as, before the last half of April, shares were surging to new 52-week highs. Mixed earnings results seem to have been the determining factor. The content delivery technology company reported earnings per share in line with estimates and a sales beat.
“First quarter 2022 results were ahead of plan as we continue building on the momentum established in the second half of 2021. Revenue for the first quarter came in at $58.0 million, up 13% year over year. Gross Margin was 30.7%, up 630 basis points year over year and Adjusted EBITDA was $2 million versus a loss of $3.3 million in the first quarter of 2021,” said Bob Lyons, President and Chief Executive Officer.
Who’s Buying LLNW Stock?
Company Director Davit Peterschmidt recently picked up 68,100 shares of LLNW stock. According to filing notes, this brought his direct ownership to 144,175 shares, which also includes 45,474 unvested restricted stock units. Peterschmidt bought this latest round of stock at average prices ranging between $3.56 and $3.67. While it isn’t nearly as prominent a figure as RVP stock insiders, it’s still more than $240,000 worth of LLNW stock.
Final Thoughts On Penny Stocks With Insider Buying
Whether following the money is your “thing” or not, researching is never a bad idea. At the very least, insider filings can help formulate a much more thought-out approach to deciding on penny stocks to buy or avoid. Today we covered a few companies with the largest amount of purchases based on dollars spent.