May 24, 2022 (Penny Stocks via COMTEX) -- Who doesn't love a good deal? Discounts at the grocery store (especially in this economy), clearance items at big-box retailers, and a nice auto sale deal price are excellent. So why not apply this same strategy to investments? You could take Warren Buffett's approach and find stocks that are "cheap" on paper. Their stock prices are significantly "low" based on the company's intrinsic value. If you're investing in stocks, this strategy has become tried and true by value investors. But what about others?
Penny stocks are sought after for their low price and high growth potential. It can be challenging to find the best cheap stocks to buy. However, traders use plenty of strategies to find names to put on their lists. One of these strategies is "following" the money. In this case, the method involves sifting through corporate filings to find insiders and "whales" investing big dough into companies.
A few days ago, we published the article " Best Penny Stocks To Buy? Einhorn, Lynch, Cohen & Dalio Own These 5 " and discussed some of Wall Street's famous names who are actually investing in penny stocks. So it isn't as uncommon as you might think for stocks under $5 to be targets of big investment. Today we look at a handful of stocks to watch based on insider trading.
Penny Stocks To Watch Before June 2022
The Marygold Companies Inc. ( NYSE: MGLD )
Nerdy Inc. ( NYSE: NRDY )
Stran & Company Inc. ( NASDAQ: STRN )
The Marygold Companies Inc. /zigman2/quotes/201380248/composite MGLD -1.96%
Shares of The Marygold Companies Inc. made their public debut earlier this year. Formerly known as Concierge Technologies, the company operates many subsidiaries, including financial services, security systems, printing, food manufacturing, and even beauty products.
In its most recent quarterly filing, the company reported lower revenue than a year ago. According to The Marygold Companies, much of the impact was due to supply chain issues, among other things. However, total assets under management in its financial subsidiary grew to roughly $5 billion. According to comments in its latest update, this appears to be the immediate focus.
Both the COO and CEO picked up shares of MGLD stock over the last week. Over 120,000 shares were purchased at average prices ranging between $1.0701 and $1.13.
Nerdy Inc. /zigman2/quotes/221611481/composite NRDY +2.01%
We talked about Nerdy Inc. earlier this week after the company announced a collaboration with the Smithsonian Institution. This collaboration offers people access to content from the Smithsonian and begins with a group online class hosted today.
Nerdy offers live, online learning with an AI-based platform to provide thousands of learning experiences. Its Varsity Tutors system specializes in live, online tutoring and classes. With this upcoming event, traders may be paying closer attention to the maiden voyage of this collaboration with the Smithsonian.
While NRDY stock insiders weren't as active as others on this list of penny stocks , there were several trades made in the last week. Both Nerdy's general council and CFO collectively purchased more than 1 million shares of NRDY stock. Average prices ranged between $1.65 and $1.89.
Stran & Company Inc. /zigman2/quotes/230845757/composite STRN +2.11%
Another more recent IPO, Stran & Company, hit the market by force late last year. Shares of STRN stock jumped to highs of nearly $7 but have since cooled off with the rest of the stock market. Today it's in focus after trading action on Monday brought back some interest in the company.
The move comes shortly after Stran reported its latest round of earnings results. The marketing solutions company recorded a 62.5% jump in revenue to $12.3 million for the first quarter. This was compared to its performance in the previous year's period. In particular, the company identified more substantial potential in the healthcare marketplace. It said that it secured a multi-year contract with "a large, nationally recognized healthcare company" to address complex marketing needs.
CEO Andy Shape explained, "We expect to continue and improve upon our track record of profitability in 2022 and beyond. We ended the quarter with $30 million in cash reserves and no long-term debt. Moreover, we are well capitalized to internally fund and execute both our organic growth and acquisition strategies."
Over the last week, Stran's CEO, VP of Growth, and Executive Chairman purchased shares of STRN stock. Roughly 38,000 were picked up at average prices between $1.73 and $1.80.
Does "Follow The Money" Work For Penny Stocks?
The whole idea of following the money is interesting. While it might be comforting to think that any insider buying stock is a bullish sign or selling stock is a bearish sign, it doesn't necessarily guarantee a move in the stock market. Today we discussed a few penny stocks with insider buying that have recently garnered some additional attention from traders. Remember that no matter what you use to find companies for your list of penny stocks, you have to have a trading strategy and plan in mind. Here are a few articles to use to get familiar with some of the different ways to trade penny stocks:
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