Insider buying and selling is a controversial topic that many investors like to pursue. An insider is described as any director or senior official of a publicly traded company. Persons or entities that own 10% or more of publicly listed companies are also considered insiders. In addition, insiders are believed to have the most knowledge of the company, and it makes sense.
According to a study from MIT Press, University of Michigan professor H. Sehun survives by tracking the shares that insiders have bought over a 19-year period. Seyhun discovered that the shares outperformed the market by 4.5% after insider buying. The stock’s after-sale insider underperformed the market by 2.7%. The conclusion from this study clearly supports the importance of internal activity tracking.
Furthermore, another study found that insider purchases outperformed the market by 11.2% annually. The researchers also concluded that company size and internal ranking are not important variables to monitor.
So what does this mean for retail investors, and why does it matter? Most importantly, insider buying may be more useful for tracking than inside selling. This is because figuring out why someone is selling from the inside is a lost cause. There are hundreds of personal reasons why an insider has sold stocks that retail investors may never know about. As famous investor Peter Lynch once said, “Insiders may sell their shares for any number of reasons, but they buy them for only one: they think the price will go up.”
With that in mind, let’s take a look at five stocks that insiders have been buying lately.
- stronghold (New York Stock Exchange:F)
- Cricut (NASDAQ:CRCT)
- rubbery (New York Stock Exchange:All)
- asana (New York Stock Exchange:easy)
- Oragenics (the new:eyes)
Insiders buy stocks: Ford (F)
Ford stock has enjoyed a generous past year, spurred by speculation about electric vehicles (EV). The automaker’s stock price has risen more than 170% over that time period. Ford recently announced that it will nearly double its planned production to 150,000 vehicles for its upcoming F-150 Lightning electric pickup truck. Retail investors are noticing, but a certain Ford executive has gotten in on the action, too.
According to a recent report, director Alexandra English Ford purchased 38,789 shares of F stock on December 20. The English Ford is also the great-granddaughter of Henry Ford. It acquired shares at an average price of $19.33, making the total transaction approximately $750,000. Furthermore, English Ford acquired these shares through a voting fund from which it is the beneficiary.
Since buying English Ford, F shares have increased 26% in less than one month. It certainly appears that English Ford made a timely purchase, but it also indicates that an insider who is involved in the company’s operations is optimistic about potential developments. This is great news for stockholders of F.
Cricut operates in a niche market, more specifically the “cutting machine” market for DIY enthusiasts. However, Cricut products are more than meets the eye. Its machines are powerful enough to cut wood and leather and also provide the ability to print labels and stickers. During the third quarter, total users grew to more than 5.7 million, representing a year-over-year growth of 55%.
Cricut also operates a subscription service that gives users access to features such as free shipping, use of more than 200,000 images, 700 fonts, and discounts on licensed content. The service is very popular, with the number of paid subscribers increasing by 55% year over year to more than 1.8 million subscribers. Most importantly, Cricut is profitable. The company announced its earnings for the eleventh consecutive quarter during the third quarter. These impressive numbers have attracted an acclaimed hedge fund to constantly buy the stock.
During the month of December, Abdul Karim Capital CRCT stock added 13 times. No, this is not a typo. Moreover, Abdul Karim has already added Cricut shares twice in the month of January. The most recent deal occurred on January 4, when Abdul Karim purchased an additional 11,300 shares at an average price of $22.99. The hedge fund boasts assets under management (AUM) of $5.8 billion as of the third quarter. Abdulkarim also works as a center fund, holding only 13 positions according to his latest 13F file.
As of today, Abdul Karim owns 11,070,266 shares of CRCT stock, which represents 33% of the offering. It’s safe to say that Abdul Karim is optimistic about the “make it yourself” company.
Stocks That Insiders Are Buying: Chewy (CHWY)
After the 2020 hack that saw Chewy shares rise more than 200% as a beneficiary of Covid-19, the following year presented an entirely different scenario. The e-commerce pet supplies seller saw its stock drop 34% during 2021 due to supply chain issues, labor shortages, inflation, and lower revenue growth. Furthermore, Chewy finished the third quarter with 20.4 million active customers, below the consensus estimates for the second consecutive quarter. Investors are also concerned that sales could drop further if the epidemic subsides completely, which would make consumers more inclined to return to traditional pet stores. However, as Warren Buffett once said, investors should be “afraid when others are greedy, and greedy when others are afraid.” Billy Gifford It does exactly that.
Baillie Gifford recently doubled down on its current Chewy position. On January 4, the fund added approximately 6.7 million shares to its position, which comes to 1,3302,667 shares held. After the purchase, Baillie Gifford now owns 12.46% of the offering. The UK-based fund manages $191 billion in assets under management and has an approved track record.
Next on the list of stocks that insiders are buying is Asana.
Asana acts as a work management platform that helps companies complete daily tasks. The company’s platform also focuses on workflow solutions that include project management, objectives, and tasks. At its peak in 2021, ASAN stock jumped to an all-time high of $145. Today, the shares are trading at a massive discount compared to their 2021 highs, down more than 55% to $62.
However, this drop from the highest levels did not prevent the CEO and founder of Asana from buying the stock.
Dustin Moskovitz has been on a relentless buying spree for quite some time now. Moskowitz’s most recent purchase occurred on January 6, when he bought an additional 500,000 shares of ASAN stock at an average price of $61.52. Moskovitz now owns a total of 1,133,676 shares, which represents about 15% of Asana’s float. Furthermore, in 2021, Moskovitz purchased a total of 8,469,676 shares of ASAN stock valued at $594,996,496 in total. However, it should be noted that Moskovitz’s purchases are made according to a pre-arranged circulation of 10b5-1 of. However, Moskowitz’s purchases show that he is bullish on ASAN stock.
Today, many insiders buy or sell stock through Form 10b5-1. This model allows insiders to hold pre-made trades for a predetermined period to avoid accusations of insider trading. In addition, the plan allows insiders to schedule deals during downtimes, such as quarterly earnings and corporate events, as long as they file Form 10b5-1 in advance.
Last month, the US Securities and Exchange Commission announced proposed changes to Form 10b5-1 that would “significantly increase disclosure requirements for such trades and require the person preparing the trades” to certify that he is not aware of material non-public information. “
Stock Insider Buys: Oragenics (OGEN)
The last list of stocks that insiders are buying this week is OGEN.
Oragenics is working to develop new antibiotics and other drugs to help treat infectious diseases. However, the biopharma company has had a rough time since becoming a public entity in 2003. Since then, Oragenics has lost more than 99% of its value.
Oragenics is currently focused on developing TerraCoV2, an immunization product designed to combat Covid-19. The company is also developing Antibiotics, a new class of antibiotics known to be effective against many life-threatening infectious agents. Furthermore, Oragenics recently expanded its collaboration with the National Research Council of Canada (NRC). The goal of the collaboration is to develop an intranasal vaccine that could help protect against the omicron variant.
Now, the company’s director is taking advantage of Oragenics’ lower prices and ongoing developments.
In Form 4 received December 31, Oragenics Director Robert Kosky made two purchases on December 30 and December 31.
On December 30, Koski bought 200,900 shares of OGEN stock at an average price of 44.98 cents. On December 31, Koski purchased an additional 799,100 shares at an average price of 47.4 cents. Koski now owns a total of 1,829,569 shares owned indirectly through the Koski Family Limited Partnership and the trusts of which Koski is the trustee. Kosky owns an additional 212,839 shares that he directly owns.
Combined, Koski’s stock ownership represents 1.78% of Oragenics’ float. OGEN shares are currently trading at 52 cents, an impressive 13% higher than Koski’s December 30 purchase price.
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At the date of publication, Eddie Bann has not (directly or indirectly) held any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author, and are subject to InvestorPlace.com’s posting guidelines.