Whether we’re talking about penny stocks or blue-chip stocks, insider transactions are always something of interest for traders. Playing more to the psychology of day trading or investing, when insiders are making moves, it sends signals to the market. Are they buying these stocks, are they selling, are they exercising options? In each case, there are different things to take into account. But at the end of the day, when insiders decide to buy penny stocks, it’s usually a sign of bullishness to those watching.
If you’re newer to trading these cheap stocks, you might be asking a question right now. How can you see insider transactions? Are they news headlines released by the company or something else? Some companies choose to update on insider transactions via headlines but many don’t. However, the one place you’ll definitely see details on trades is in a company’s filings.
What Shows Insider Trading?
As far as insider activity is concerned, you’ll want to focus on the “SEC Filings”. What should you look for? Most will seek out Form 4 filings. These will show an insider’s various transactions in company securities. It includes the amount purchased/sold, the price per share, and the date of the transaction. The Form must also be filed within 2 business days following the transaction date. While this is the most popular Form for following insider transactions, there are also a few other Form types you’ll want to be aware of.
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These are usually less frequent but worth knowing. Form 3s get filed when someone first becomes an insider. Examples of this include new hires brought on as officers or directors of a company. This Form shows the initial ownership position in the company’s securities and gets filed within 10 days of the person becoming an insider.
Form 5’s are the “clean up” form in my opinion. These are usually filed 45 days after a company’s fiscal year-end. They’re only required when an insider makes at least 1 transaction because of failing to report earlier or from an exemption that wasn’t reported during the year. Certain insider purchases for less than $10,000, for example, may not be required via a Form 4. However, they have to eventually get disclosed, in which case, these transactions are reported via Form 5. Now that we’ve got some of the basics down, let’s take a look at some penny stocks insiders decided to buy before the new year.
Penny Stocks To Buy [According To insiders]
- Usio Inc. (USIO)
- Cellectar Biosciences Inc. (CLRB)
- DPW Holdings Inc. (DPW)
- Clearside Biomedical Inc. (CLSD)
Usio Inc. (NASDAQ:USIO)
Usio Inc. is in one of the increasingly popular niches of the market: fintech. The company provides electronic payment solutions for its clients. As we’ve seen, things like Bitcoin are bringing up a bigger focus on digitized currency exchanges and online retail has made it almost a necessity to have an efficient means of digital payment processing.
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In Usio’s case, the company most recently acquired the assets of Information Management Solutions, LLC. IMS provides electronic bill presentment, document composition, document decomposition and printing and mailing services. According to Usio’s update on this deal, IMS has hundreds of customers representing a wide range of industry verticals, including utilities and financial institutions.
Which insiders bought shares of USIO stock? If you look at the SEC Filings of the company, you’ll see many Form 4s files in December. The most frequent buying has come from Topline Capital Management, LLC, which is a 10% owner and, an exempt reporting adviser. During the course of December, the firm picked up hundreds of thousands of shares right up until the final days of the month.
Cellectar Biosciences Inc. (NASDAQ:CLRB)
Cellectar is another one of the companies experiencing some insider activity. A look at the company’s SEC Filings will show a string of Form 4s toward the end of December. This showed the company’s Chief Business Officer, Chief Executive Officer, and Chief Financial Officer buying over 70,000 shares of CLRB stock at an average price of $1.35. These transactions were also made the same day that analysts at Oppenheimer adjusted their price target higher, to $5.50 on the stock. Oppenheimer also maintains an Outperform rating on the company.
Cellectar recently issued a quarterly update. James Caruso, CEO of the company, explained that “we continue to make good progress towards the fourth quarter initiation of the CLR 131 pivotal study in our lead heme-oncology indication. Our recent FDA guidance meeting was most encouraging and we look forward to providing greater details in the near term.”
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Heading into the new year, CLR 131 could be a bigger focus. Furthermore, considering that there haven’t been any updates on this study, yet, it could be something to keep in mind heading into the first month of 2021.
DPW Holdings Inc. (NYSEAMERICAN:DPW)
DPW Holdings is one of the companies we’ve discussed in the past. We also noted the recent insider buying that the company saw in December. However, if you look at the company’s SEC Filings at the end of the year, there was one more Form 4 filed before year-end. It showed a number of purchases made by the company’s CEO between $4.13 and $4.50.
While there’ve been plenty of questions raised about this company over the last few years, traders continue following. It was a big focus of bitcoin stock watchers a few years back. This year, there’s been a lot more attention placed on some of the company’s other subsidiaries. One of the healthcare companies that DPW invested in has become a point of focus recently. Alzamend Neuro focuses on treatments and cures for Alzheimer’s disease. DPW has an investment in Alzamend through its subsidiary, Digital Power Lending, LLC. Alzamend Neuro® announced this week that it submitted a draft registration statement on Form S-1 with the Securities and Exchange Commission to go public. The public offering is expected to begin after the SEC completes its review process.
What’s more is that DPW has also expanded its reach into the popular electric vehicle space. The company’s Coolsys subsidiary announced that it created a program to allow its ACECool vehicle chargers at a large range of fast-food franchises. This will likely include locations in California, Nevada, and Canada.
Clearside Biomedical Inc. (NASDAQ:CLSD)
Clearside Biomedical was one of the most active names on this list of penny stocks, last week. The time between November and December saw one of the biggest price movements in the market for CLSD stock all year. Shares rallied from around $1.30 to highs of $3.13 on New Year’s Eve. While there haven’t been many corporate updates at the end of the year, that doesn’t mean there aren’t things to consider heading into 2021. The biopharmaceutical company announced in November that two presentations of its preclinical and clinical data were given at the virtual American Academy Ophthalmology 2020 Annual Meeting. That was the last major update and a big one at that based on how the market reacted.
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The company explained that its CLS-AX demonstrated prolonged duration. The U.S. FDA further accepted Clearside’s Investigational New Drug Application and a Phase 1/2a clinical trial in wet age-related macular degeneration (wet AMD). This was expected to begin by the end of 2020.
Against this backdrop and not seeing any further updates on this, it’s interesting to see insiders are making moves. CEO George Lasezkay picked up a few thousand shares during the holiday week. Furthermore, one of its 10% owners, Bradford Whitmore snagged over 50,000 shares around the same time at an average price of $1.9513.
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