Key Points
- Insiders heavily bought some stocks in January, but not all insider buying is a signal for investors to buy.
- Stocks with high short interest, are in danger of dilution or have no revenue or earnings will likely trend lower.
- Stocks with earnings and dividends should see their shares gain value in time.
January market action can be called nothing if not interesting, with the broad market hitting a new high and insiders actively buying stocks. The four listed today are the hottest tickets in January based on the number of insiders buying, a more telling indicator than simply dollar amounts.
As they say, the more, the merrier, so it makes sense to think that the more insiders buying, the better the signal. If one insider thinks the stock is a buy, that’s a good sign; if three or four others think the same, it’s great, right? The answer to that is no. Insiders don’t always buy because they know their stock is cheap. Sometimes, they do it because they hope it is. It takes a little digging to determine the better buys; read on to find out which stocks should be on your watchlist and which are ripe for shorting.
OPKO Health, a penny stock that may have further to fall
OPKO Health (NASDAQ: OPK) insiders have bought this stock consistently for years and own more than 40% of the shares. Recent purchases include six executives, including the CEO, who owns about 30%, and he at least made more than one purchase in January. Despite this, the shares have been unable to maintain market support and recently hit a new low. That low is aided by short-sellers who see dilutive actions outweighing the company’s potential, which is significant.
Short-selling was near 25% in mid-January and is not likely to have declined much, given the chart’s look. Institutions own about 20% of the market but may only help support the stock price once short-sellers see their way out. That might not be for a few quarters.
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OPKO Health has tailwinds, including a recent FDA approval and a pipeline of promising products, but cash flow is an issue. The latest plunge in share price is due to a dilutive convertible debt offering that is unlikely to be the last. Analysts are hopeful; there are four tracked by Insidertrades.com rating the stock a consensus Buy with a price target 280% above the recent low.
Coeptis Therapeutics Holdings advances technology but not its share price
Coeptis Therapeutics (NASDAQ: COEP) is another penny healthcare stock with insiders buying. Five insiders made six purchases, including the CEO, CFO and a director. Together, insiders hold about 21% of the stock and may continue to buy in 2024. Coeptis Therapeutics is engaged with advancing cell-based treatments in various categories and could produce a marketable product soon. However, the company is plagued by a lack of revenue, if not by high short interest, and may not see its share price advance soon. There is no expectation for revenue in 2024.
And then there’s The York Water Company, a great buy for income seekers
The York Water Company (NASDAQ: YORW) is a small water service in York County, PA. The company has a history of providing shareholder value through its increasing dividends and is trading at the lowest levels since 2020. Five insiders bought the stock at this level, continuing a trend of steady buying that has been in place for years.
Insiders own about 1.3% of the stock, not much, but that is compounded by a near-50% institutional interest and virtually no short sales. Insiders include a director, the CEO, the CAO, the CFO, and a VP. The dividend is worth about 2.4% with shares at this pricing; it has been increased for 26 consecutive years, and the distribution is only 50% of the earnings. Earnings are growing in F2023 and are expected to grow in F2024.
High-yield Community Trust Bancorp is cheap
High-yielding Community Trust Bancorp (NASDAQ: CTBI) is a small financial institution in Kentucky. It is a small-cap bank yielding a relatively safe 4.4% while trading at only 10X earnings. The yield and value make it attractive, but insider buying ups the ante. Five insiders bought in January, extending a trend from 2023, including the bank president, the CEO, and several EVPs. They own about 4% of the stock, and institutions own another 60%. The dividend yield is reliable for 2024 at 40% of the earnings outlook and can be expected to grow. The company has increased for 43 consecutive years and shows no signs of stopping.
Companies in This Article:
| Company | Current Price | Price Change | Dividend Yield | P/E Ratio | Consensus Rating | Consensus Price Target |
|---|---|---|---|---|---|---|
| OPKO Health (OPK) | $1.02 | +3.6% | N/A | -3.78 | Buy | $3.85 |
| York Water (YORW) | $36.00 | +1.1% | 2.33% | 22.64 | N/A | |
| Community Trust Bancorp (CTBI) | $42.00 | +0.3% | 4.38% | 9.66 | N/A | |
| Coeptis Therapeutics (COEP) | $0.58 | +2.7% | N/A | N/A | Buy | $4.33 |
About Thomas Hughes
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.