The technology sector was the star performer in 2020 as the tech-heavy Nasdaq index soared 43%. Along with the broader U.S. stock market, the technology group as trended higher this year on continued expectations of a strong economic recovery.
So, with many companies trading near all-time highs and high valuations, it has become a challenge to find undervalued stocks, particularly in technology. One avenue investors can use to discover undervalued stocks is insider buying. Knowing what those in the know are thinking about a company's potential can be a valuable tool.
Let's take a look at a few technology stocks that insiders have deemed to be a good buy in 2021.
Is Anterix Stock a Good Infrastructure Play?
There has been a good amount of insider buying of late in Anterix (NASDAQ:ATEX) stock. The purchase that has stood out the most is Owl Creek Asset Management's $6.5 million order of February 17th. This sent the stock gapping higher in more than twice the average daily volume.
After some investors used the spike as a sell opportunity, the New York-based investment firm was right back at it. A week later it bought another $407,945 worth of Anterix to bring its total position to more than 5.4 million shares. This represents more than 30% of the outstanding shares.
Needless to say, Owl Creek has high hopes for the company's growth prospects around its 900-megahertz broadband service. Anterix is positioning itself as a provider of private broadband to infrastructure companies. As the largest owner of the 900 MHz band, it is aiming to play a key role in the U.S. modernization of the energy, logistics, and transportation industries.
Anterix may very well be an underappreciated infrastructure play. In addition to Owl Creek, the company's CFO and a pair of Directors have been active in buying the stock. With so many insiders hooting and hollering about Anterix, the stock's current three-month winning streak may just be the beginning.
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What Does GTY Technology Holdings Do?
Back on December 17th, 2020 GTY Technology Holdings (NASDAQ:GTYH) gapped higher in unusually high volume. Yet, it was only last month that board member Harry You filed an SEC Form 4 revealing himself as the source of the big splash. His purchase of more than 3.4 million shares at $3.93 made the director a 10%-plus shareholder and propelled the stock on an impressive run above $8.00.
Since the double, GTY Technology has trended lower. It'll be interesting to see if Mr. You and other insiders increase their positions with the stock now trading back at the $5.00 level.
Unfortunately, an ominous technical pattern on the daily chart points to the more potential downside. On March 19th, a symmetrical continuation triangle formed when the stock was trading at $7.00. The bearish long-term chart formation points to a possible slide to the $1.75 to $2.75 range within the next few months.
GTY Technology provides procurement, digital payments, grants management, permitting, and budgeting software to the government sector. More than 1,500 public sector organizations in the U.S. and Canada use GTY's software solutions to make data-driven decisions and improve their operational efficiency.
As state and local governments continue to migrate to a cloud computing environment, GTY Technology will have opportunities to capitalize on a large and growing government technology market. In the meantime, it remains to be which direction the technicals and fundamentals steer this micro-cap stock.
Is the Marchex Stock Pullback a Buy Opportunity?
Another micro-cap stock with some interesting insider activity is Marchex (NASDAQ:MCHX). The Seattle-based advertising company offers technology-based solutions designed to drive customers to a range of businesses. Digital marketing tools and customer call analytics are becoming increasingly popular in the pandemic economy and Marchex is looking to pounce on the opportunity.
So too is Edenbrook Capital, a New York-based investor advisor and Marchex insider. On March 31st, the firm made a small purchase of the class B common stock for the Edenbrook Long Only Value Fund. This was followed by a much larger $280,000 buy on April 9th at a price of $2.80. It brought Edenbrook's position to more than 12.1 million shares which represent more than 30% of the outstanding shares.
Unlike GTY Technology, the technical analysis appears to be in the insiders' favor when it comes to Marchex. On April 21st, a bullish continuation wedge formed on the daily chart suggesting a possible short-term run from $2.90 to as high as $3.70. The stock went on to ascend to $3.22 a week later but has since pulled back below $3.00.
But if Edenbrook and sell-side analysts have it right, the recent dip could be a great buy opportunity. Both firms that cover Marchex call it a 'buy' with price targets of $4.00 and $4.75. The company's first-quarter earnings report could go a long way in deciding what the stock dials up next.
Companies in This Article:
|Company||Current Price||Price Change||Dividend Yield||P/E Ratio||Consensus Rating||Consensus Price Target|
|GTY Technology (GTYH)||$6.19||flat||N/A||-8.84||Buy||$8.00|