Key points
- Insiders bought some stocks heavily in January, but not all insider buying is a signal for investors to buy.
- Securities with high short-term interest, that are likely to become diluted, or that have no revenue, or that earnings are likely to trend downward.
- Earnings and dividend stocks should see their shares gain value over time.
January’s market performance can simply be described as interesting, with the overall market hitting a new high and insiders actively buying shares. The four listed today are the hottest tickets in January based on the number of insider purchases, a more meaningful indicator than simple dollar amounts.
As they say, the more the better, so it makes sense to think that the more insiders buy, the better the signal. If an insider thinks the stock is worth buying, that’s a good sign; if three or four others feel the same way, that’s great, right? The answer is no. Insiders don’t always buy because they know their shares are cheap. Sometimes they do it because they hope it is. It takes a bit of research to determine the best buys; read on to find out which stocks should be on your watch list and which are ripe for shorting.
OPKO Health, a penny stock that could have further declines
OPKO Health (NASDAQ:OPK) Insiders have been buying these shares consistently for years and own more than 40% of the shares. Recent purchases include six executives, including the CEO, who owns about 30%, and made at least more than one purchase in January. Despite this, stocks have failed to maintain market support and recently hit a new low. This low level is aided by short sellers who see dilutive shares exceeding the company’s potential, which is significant.
Short selling was close to 25% in mid-January and probably hasn’t fallen much given the way the chart looks. Institutions own about 20% of the market, but can only help prop up the stock price once short sellers find their way out. This may not be the case for some quarters.
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OPKO Health has advantages, including a recent FDA approval and a promising product pipeline, but cash flow is an issue. The latest share price collapse is due to a dilutive offering of convertible debt that is unlikely to be the last. Analysts are confident; there are four tracked by Insidertrades.com that rate the stock a consensus Buy with a price target 280% above the recent low.
Coeptis Therapeutics Holdings advances technology but not its stock price
Coeptis Therapeutics (NASDAQ:COEP) is another penny healthcare stock bought by insiders. Five insiders made six purchases, including the chief executive, the finance director and a director. Together, insiders hold about 21% of the shares and could continue buying into 2024. Coeptis Therapeutics is committed to advancing cell-based treatments across various categories and could soon produce a marketable product. However, the company is plagued by a lack of revenue, if not high short interest, and may not see a rise in its stock price anytime soon. No revenue is expected in 2024.
And then there’s The York Water Company, a great buy for those looking for income
York Water Company (NASDAQ:YORW) is a small water utility in York County, Pennsylvania. The company has a history of delivering shareholder value through its growing dividends and is trading at its lowest levels since 2020. Five insiders bought the stock at this level, continuing a trend of steady buying that has been underway since years.
Insiders own about 1.3% of the shares, not a lot, but add to that institutional interest close to 50% and virtually no short selling. Insiders include a director, the CEO, the CAO, the CFO, and a vice president. With shares at this price the dividend is worth around 2.4%; it has been increased for 26 consecutive years and the distribution is only 50% of profits. Earnings are growing in F2023 and are expected to grow in F2024.
High Yield Community Trust Bancorp is cheap
High-performance Community Trust Bancorp (NASDAQ:CTBI) is a small financial institution in Kentucky. This is a small-cap bank that yields a relatively safe 4.4% yield while trading at just 10 times earnings. The yield and value make it attractive, but internal purchases up the ante. Five insiders bought in January, extending a trend from 2023, including the bank’s president, CEO and several EVPs. They own about 4% of the shares and institutions own another 60%. The dividend yield is reliable for 2024 at 40% of the earnings outlook and is expected to grow. The company has been growing for 43 consecutive years and shows no signs of stopping.
Companies in this article:
| Agency | Current price | Price change | Dividend yield | P/E ratio | Consensus assessment | Consensus price target |
|---|---|---|---|---|---|---|
| OPKO Health (OPK) | $1.02 | +3.1% | N/A | -3.76 | Acquire | $3.85 |
| York Water (YORW) | $35.77 | +0.4% | 2.35% | 10.50pm | N/A | |
| Community Trust Bancorp (CTBI) | $41.78 | -0.2% | 4.40% | 9.60 | N/A | |
| Coeptis Therapeutics (COEP) | $0.60 | +5.5% | N/A | N/A | Acquire | $4.33 |
Experience
Thomas Hughes has been working with InsiderTrades.com since 2019.
Areas of expertise
Technical Analysis, S&P 500; retail, consumer goods, consumer staples, dividends, high yield, small cap, technology, economic data, oil, cryptocurrencies
Education
Associate of Arts in Culinary Technology
Past experience
Market observer, trader and investor for numerous websites. Founded Passive Market Intelligence LLC to provide market research insights.