Key Points
- Lumen Technologies is turning a corner and should see sequential improvements through year-end.
- OncoCyte has deals with Bio-Rad that should help boost revenue and profitability over the next year or two.
- Clearside Biomedical is on track to grow revenue and attain profitability; insiders are buying.
As they say, Penny stocks are a dime-a-dozen, making picking unique penny stock investments a challenge. Among the many indicators penny stock investors can use is insider buying. Insider buying doesn’t guarantee investment success for penny stocks, but it alleviates some of the risks. Insiders, specifically CEOs and C-suite executives, have no reason to buy stock if the company is ailing, and every reason to buy it when the stock is down and the outlook is good or improving.
Lumen Technologies Insider Buying Spikes as Turnaround Takes Hold
Lumen Technologies (NYSE: LUMN) insiders were inactive for a year until Q4 2023. That was when the buying spiked, and it has remained solid since. Insidertrades.com tracks four trades by three insiders in the last 90 days, including the CEO, the CFO, and a director. Buyers over the last three quarters include the CEO, CFO, and several directors; their activity brought total ownership up to 1.7% and growing. The caveat is that buying coincides with a floor in the market that may not be the lowest low set. The company is in a turnaround but is not yet out of the weeds.
Highlights from Q1 2024 include a debt restructuring deal that opens a 5-year runway to effect change. Details from the Q1 report include a double-digit decline in the enterprise but a significant high-double-digit gain in fiber broadband, the company’s growth avenue. Lumen Technologies, formerly CenturyLink, provides communications, networking and edge computing solutions.
Results are not expected to be good this year. Still, the CEO says Q1 is a trough, and sequential improvements are expected. Analysts have a consensus Neutral/Hold rating for the stock and view it as undervalued, trading 30% below the midpoint estimate and the low end of the range.
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OncoCyte Corporation is Tightly Held Despite Price Implosion
Shares of OncoCyte Corporation (NASDAQ: OCX) are down significantly from their highs two years ago, but it is still a tightly held issue. Institutions own about 53% of the company, including Broadwood Partners, which holds about 18% of the stock. Broadwood Partners is owned by Broadwood Capital, a private investment firm headquartered in New York.
OncoCyte is a precision diagnostics biomedical firm focused on transplant medicine. The company has experienced a significant downtick in business, but that may change soon because of collaborative efforts with Bio-Rad Laboratories (NYSE: BIO). Bio-Rad has become the exclusive distributor for new organ transplant monitoring technology; the deal is expected to boost OncoCyte revenue by a solid triple-digit figure and lead to profitability over time.
Inside activity spiked in Q2 2024 when the CEO, CFO, and major shareholder Broadwood Partners made purchases on the same day. The CEO and CFO activity brings the insider ownership up to 1.95%. Shares of OncoCyte are trading near the lowest levels since the IPO but may be at rock bottom.
Clearside Biomedical Chairman Bets Big on This Biopharma
Clearside Biomedical (NASDAQ: CLSD) focuses on back eye treatments. The company has one product on the market and several in the pipeline that show promise. The company is in its revenue-generating phase and is expected to grow significantly over the next two years.
Insider activity is mixed with the CEO and CFO selling in Q1. However, purchases by two directors offset the sales, and one director is chairman of the board. The chairman, Bradford T. Whitmore, owns about 6% of the business. Insiders own about 10% of the total, and institutions about 20%. Institutional activity spiked in Q2 this year and supports the price action. The stock is trending sideways at a bottom and shows signs of upward bias that could lead to a fresh high later in the year.
Companies in This Article:
| Company | Current Price | Price Change | Dividend Yield | P/E Ratio | Consensus Rating | Consensus Price Target |
|---|
| Clearside Biomedical (CLSD) | $1.31 | flat | N/A | -2.38 | Buy | $4.50 |
| OncoCyte (OCX) | $2.93 | -4.6% | N/A | N/A | Moderate Buy | $4.06 |
| Lumen Technologies (LUMN) | $1.32 | +0.8% | N/A | -0.12 | Reduce | $1.76 |
Experience
Thomas Hughes has been a contributing writer for InsiderTrades.com since 2019.
Areas of Expertise
Technical analysis, the S&P 500; retail, consumer, consumer staples, dividends, high-yield, small caps, technology, economic data, oil, cryptocurrencies
Education
Associate of Arts in Culinary Technology
Past Experience
Market watcher, trader and investor for numerous websites. Founded Passive Market Intelligence LLC to provide market research insights.
