Penny stocks are risky. That’s why we attach a warning to the tail-end of penny stock articles. It’s also why the SEC warns of their dangers.
“Penny stocks may trade infrequently — which means that it may be difficult to sell penny stock shares once you have them. Because it may also be difficult to find quotations for penny stocks, they may be impossible to accurately price. Investors in penny stock should be prepared for the possibility that they may lose their whole investment.”
In short, pay close attention to the warnings. Never risk more than you can afford to lose. Always have a protective stop loss in place. And pay close attention to the penny stocks where insiders are putting their money where their mouth is. After all, it’s the insiders who know their company the best. If they’re buying a sizable number of shares, it’s often a good idea to start looking into why. Here are three to consider.
Monopar Therapeutics (MNPR)
Monopar Therapeutics (NASDAQ:MNPR) — a clinical-stage radiopharmaceutical — saw its chief operating officer buy about 36,000 shares.
Helping, the company just initiated its Phase 1 dosimetry clinical trial for its novel radiopharmaceutical imaging agent MNPR-101-Zr. According to the company, “The antibody MNPR-101 targets the urokinase plasminogen activator receptor, which is expressed on numerous tumor types including pancreatic, breast, colorectal, and bladder.”
In addition, “Monopar recently shared positive preclinical efficacy data showing potent and durable anti-tumor activity of MNPR-101 bound to therapeutic radioisotopes.”
Analysts at Jones Research recently upgraded MNPR to a Buy rating with a $2 price target. Earnings haven’t been too shabby. In its most recent quarter, the company posted an EPS loss of 10 cents, beating estimates for a loss of 14 cents. Also, at the end of March 2024, it held $8.8 million in cash, which the company says will be sufficient through June 30, 2025.
Petco Health and Wellness (WOOF)
We can also look at Petco Health and Wellness (NASDAQ:WOOF), where director Cameron Breitner recently bought 750,000 shares at an average price of $3.14 each. The transaction was valued at about $2.35 million. Now at $4.12, WOOF could trek even higher.
Helping, the pet industry is expected to soar from about $320 billion to about $500 billion by 2030, according to Bloomberg Intelligence. “The report finds that this growth is boosted by a growing pet population worldwide, as well as the premiumization of food and services resulting from the continued humanization of animal companions,” the report added.
In addition, WOOF recently made some needed changes to management, including the removal of its chief operating officer position. The company also just posted better-than-expected earnings. In its first quarter, its loss of four cents beat by two cents. Revenue of $1.53 billion, down 1.7% year over year, beat by $20 million. Also, while same-store sales did drop 1.2% year over year, it typically averages 2.4% growth annually.
Aurora Innovation (AUR)
Aurora Innovation (NASDAQ:AUR), a self-driving tech company, just saw Uber Technologies (NYSE:UBER) buy about $75 million worth of stock. That makes UBER a major stakeholder in the stock.
As noted by Investing.com, “Uber’s strategic investment comes at a time when the company is looking to diversify and strengthen its ties with technology partners. With this latest purchase, Uber continues to demonstrate its commitment to innovation and its belief in Aurora’s potential to contribute to Uber’s growth and expansion in the tech sector.”
In addition, Volvo Autonomous Solutions just unveiled AB Volvo’s (OTCMKTS:VLVLY) first-ever production-ready autonomous truck in Las Vegas — using Aurora Innovation technology. “The result is a purpose-designed and purpose-built autonomous truck that is aimed to be the key enabler to increasing freight capacity across the United States,” they noted.
While the AUR stock chart isn’t too attractive at the moment, give it time. With massive insider buying and its relationship with Volvo, it could accelerate higher in the near term.
On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
Read More: Penny Stocks — How to Profit Without Getting Scammed
On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.