2 penny stock insiders are buying

Penny stocks are riskier than others for many reasons, including profits and liquidity. Penny stocks trade for pennies a share, often at deep discounts to competitors, because they haven’t yet generated profits for their owners and may not soon. Profits are the most significant factor for a publicly traded stock and its share prices because they affect liquidity, which is insufficient for most serious investors.

Markets with low trading volume have low liquidity. They cannot absorb orders quickly or efficiently, so even small orders can have a major impact on prices. One way to limit risk is to follow insiders because they know best how a company performs. Insiders have little reason to buy shares unless business is good or improving. Today, we’re looking at two penny stocks with catalysts for higher stock prices that insiders are buying.

OPKO Healthcare Insiders Continue to Buy the Stock

OPKO Health (NASDAQ:OPK) appeared on Insidertrades.com’s radar in January as one of the most interesting insider buys for the new year. Seven insiders had made nine transactions at the time, putting it at the top of the list. Insiders continued the trend in February, adding two more transactions. These were made by Dr. Phillip Frost, president and CEO of the company, who now holds nearly 30% of the shares. Together, insiders own more than 40% and the sum is expected to rise. Insiders have only been buying shares in the last three years and the selling sentiment is solid.

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Institutions own just 22% of the healthcare company, but have been buying into the balance sheet over the past year. Analysts are more bullish, rating the stock as a Buy with a triple-digit price target above the price action. The consensus price target of $3.85 is nearly 300% above the price action, and the low target of $2 implies a deep value opportunity and 100% upside.

Potential catalysts for the company are the FDA approval it received last year and industry normalization. The company’s diagnostics business, heavily dependent on COVID-19, is slowing profitability, but is expected to be right-sized in 2024 through cost cuts and capacity reductions. The FDA approval is for Ngenla, a treatment for children with deficient levels of growth hormones. The company also has a promising pipeline, including two additional approvals for Ngenla and several antibody therapies for solid tumors, leukemia, and hematologic malignancies.

Southland Holdings insiders shift gears and start buying shares

Southland Holdings (NASDAQ:SLND) is a construction company specializing in infrastructure projects. The company’s two segments include civil and transportation, encompassing all aspects of construction related to infrastructure, pipelines, waterways, roads, bridges and structures.

The stock has come under heavy pressure in 2023 due to unexpected losses and insider selling, but a bottom is now in play. Insiders, who had been selling mostly after the IPO, shifted gears in December and started buying the shares. Buyers include the CEO, COO and a director; Insiders and large shareholders own around 90% of these shares.

Analysts are bullish on Southland Holdings. Insidertrades.com tracks two analysts with current ratings and they have pegged it at a Moderate Buy company. The price target implies deep value with 60% upside at the consensus midpoint and 50% upside at the low end of the range. Among the stock’s catalysts are a series of new contracts that promise to spur activity in 2024 and 2025. The contracts are worth nearly $500 million and include maintenance of some of America’s most iconic landmarks , such as the RFK Bridge and the San Francisco -Oakland Bay Bridge.

The SLND stock chart shows a market ready to rebound. The market sell-off has overextended into 2023 and is now showing a solid buy signal ahead of its fourth-quarter earnings release. Fourth-quarter results may not be enough to catalyze a turnaround, but guidance likely will. The critical details will be margin and profitability and how they impact the outlook for 2023. As it stands, analysts expect to see stable revenues with significantly improved margin and rising profits.

Companies in this article:

Agency	Current price	Price change	Dividend yield	P/E ratio	Consensus assessment	Consensus price target
OPKO Health (OPK)	$1.04	+3.9%	N/A	-3.83	Acquire	$3.85
South (SLND)	$4.92	-1.0%	N/A	N/A	Moderate purchase	$8.00