For better or worse, stories related to insider trading activity have been prevalent in recent years. While there is of course, the unethical and illegal side of insider trading, there is also the benign and often very telling side.
The legal variety of insider buying is commonly defined as a stock purchase made by a member of management or the Board of Directors that is appropriately registered with the Securities and Exchange Commission.
In contrast, illegal insider buying involves an attempt to use non-public material information for personal profit. This is often associated with a large volume transaction that occurs absent any company press releases or major news.
When insiders buy shares of the company they are connected with, and follow the rules, it can be a powerful cue for retail investors about the long-term growth prospects of the business.
Let's take a look at three stocks that have been the subject of some big time buying by individual or institutional insiders.
Who is QuantumScape's Largest Shareholder?
QuantumScape (NYSE:QS) has been one of the most volatile U.S. stocks since its November 2020 IPO. The maker of solid-state batteries for electric vehicles (EV) had a stunning rally out of the gates. Before the stock was even a month old, it had soared from $25 to more than $130. A little over four months later, it is back where it all began.
The incredible fall from grace has coincided with a broader assault on stocks with stratospheric valuations and in particular those related to the EV space. Will there be an encore performance for QuantumScape?
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Key corporate partner Volkswagen certainly thinks so. The German automaker joined forces with QuantumScape back in June 2018 to make sure it had access to the company's solid-state battery technology. Through a joint venture, the duo is hoping to commercialize the innovative technology as the future of long-range EV power.
On March 30th, 2021, Volkswagen disclosed an investment of more than $100 million worth of class A QuantumScape shares. This was the Volkswagen's second $100 million investment in QuantumScape and was predicated on QuantumScape meeting a technical milestone. The investment is expected to close on May 14th. After Volkswagen essentially doubled down on its investment, it'll be interesting to see if other investors hitch a ride.
Are Insiders Buying Marker Therapeutics?
Marker Therapeutics (NASDAQ:MRKR) is a micro-cap biotechnology stock that recently saw some mega insider buying. Using its MultiTAA technology, the company develops T-cell-based immunotherapies that are designed to treat various blood and solid tumor cancers.
The stock has twice endured reverse stock splits to stay listed and continued its slide to a new all-time low of $1.32 in October 2020. It has since trended higher with the help of several insider purchases.
On March 16th, Chief Development Officer (CDO) Juan Vera bought 571,428 shares at $1.75, or $1 million of Marker Therapeutics. Not to be outdone, Director Robert Wilson bought $3 million worth of the stock on the same day. Board member Steve Elms made a similar $2 million purchase. Also on March 16th, President and CEO Peter Hoang chipped in with a $250,000 buy.
In total, the four-legged purchase was more than $6 million and sent a clear message to the market that insiders believe Marker Therapeutics can turn things around. The stock has since trended higher and is currently about 30% above where the purchases were made.
Earlier this year research firm Roth Capital called Marker Therapeutics a $6.00 stock. If the biotech can deliver positive clinical data and advance its cell therapy platform as insiders think it can, there could be some very large gains ahead.
Is Augusta Gold a Good Penny Stock?
Staying in penny stock land, but moving over to the overt-the-counter (OTC) market, Augusta Gold (OTCMKTSMKTS:AUGG) is another name insiders are hoping can right the ship.
Over the last three months, Augusta Gold insiders purchased over $6 million worth of this low-priced stock. The bulk of the buying came from Vancouver-based Augusta Investments, which is part of a management firm focused on the mining sector. Augusta Gold is one of the group's three main investments with Titan Mining and Solaris Resources the others.
On March 4th, Augusta Investments purchased nearly 3 million shares of its own interest at an average price of $1.78. This was preceded by a wave of insider buying that included far smaller transactions by various Augusta Gold executives and directors. But even though these buys paled in comparison, the fact that 10 different insiders bought Augusta Gold shares or warrants in a short period is a compelling show of support.
Unfortunately, Augusta Gold stock is currently trading exactly where it was when most of these purchases were made—but that doesn't mean it can't move higher over time. The company owns approximately 7,800 acres of land in the Bullfrog district of Nevada, a mountain range in the Mojave Desert named after the bullfrog-like tint of its ore. If the price of gold can return to the $2,000 per ounce level, even highly speculative gold miners like Augusta Gold will could see an uptick in their financial performance.
Companies in This Article:
|Company||Current Price||Price Change||Dividend Yield||P/E Ratio||Consensus Rating||Consensus Price Target|
|Marker Therapeutics (MRKR)||$3.56||+6.3%||N/A||-5.56||Buy||$8.67|
|Augusta Gold (AUGG)||$0.00||flat||N/A||N/A||N/A||N/A|