We recently published a list of 12 Penny Stocks with Insider Buying in 2025. In this article, we are going to take a look at where Biodesix, Inc. (NASDAQ:BDSX) stands against other penny stocks with insider buying in 2025.
Insider trading can be a reliable signal for gauging the degree of confidence that management has in the future of their company. This practice has been supported for decades by leading investors and analysts, who claim that there is only one reason for insiders to buy shares of their own companies – if they strongly believe the share prices are going to rise significantly. We discussed the theory behind insider buying in one of our recent articles named 10 Large-Cap Stocks with Insider Buying in 2025.
Insider buying can be an even more significant signal in the case of penny stocks, which are usually small- or micro-cap companies, because these stocks are often underfollowed or not followed at all, leading to significant price inefficiencies and overreactions from investors. This, in turn, may create pockets of opportunity that insiders exploit by leveraging their confidential information and visibility. Furthermore, given the smaller market cap, insiders can exert significant upward pressure on the stock price, which may help boost morale among shareholders.
READ ALSO: 10 Technology Stocks with Insider Buying in 2024
Empirical studies suggest that small caps tend to underperform relative to large caps during tough economic conditions, such as slowing GDP growth, inflation, high interest rates, and other exogenous pressures. Many believe that the US has already entered a new regime, called “Trump 2.0,” which will be dominated by higher inflation, lower economic support from government spending, and reduced availability of cheap labor, among several other possible challenges. Some surveys have hinted at a deteriorating business outlook among small- and mid-sized businesses, marked by lower CapEx budgets. Yardeni Research charts show that small-cap forward earnings have lagged significantly behind large caps since 2023. On top of that, the new economic regime in the US could further exacerbate these discrepancies and lead to greater relative underperformance of small caps, including penny stocks.
While the aforementioned developments could be bad for existing penny stock investors, they could also create investment opportunities for new investors. As the US broad market is still trading near its all-time highs, it has become increasingly difficult to find undervalued or even fairly valued large- and mid-cap companies. In such an environment, investors seeking higher returns may turn to smaller, lesser-known stocks with strong growth potential. The key takeaway for investors is that penny stocks could offer much more attractive, high-upside opportunities than large caps, and watching insider buying signals provides further reassurance regarding stock picking.
Our Methodology
We used Insider Monkey’s insider trading stock screener to find penny stocks trading under $5.00 share price with at least two insiders buying shares worth at least $100,000 in the last six months. We believe that multiple insiders buying significant amounts of stock represents a higher chance that insiders have high confidence in the company. For all the companies, we also include the number of hedge funds holding stakes in them, tracked by Insider Monkey as of Q4 2024. The stocks are ranked according to hedge fund positions.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A laboratory technician viewing a microscope slide containing a sample of a blood-based lung test.
Biodesix Inc. (NASDAQ:BDSX)
Number of Hedge Fund Holders: 18
Biodesix, Inc. (NASDAQ:BDSX) is a data-driven diagnostic solutions company specializing in lung disease. Utilizing an artificial intelligence-based platform, the company develops blood-based tests to address critical clinical questions. Their testing strategy assesses the risk of malignancy in pulmonary nodules, aiding physicians in determining appropriate patient management. For lung cancer patients, their proprietary strategy integrates several tests to support treatment decisions across all stages of the disease. BDSX also collaborates with biopharmaceutical companies, offering diagnostic research, clinical trial testing, and the development of companion diagnostics. The company leverages its proprietary AI platform to address complex diagnostic challenges in lung disease.
Biodesix, Inc. (NASDAQ:BDSX) delivered strong performance in the latest Q3 2024 with 35% YoY revenue growth, achieving $18.2 million in total revenue and maintaining robust gross margins of 77%. The lung diagnostic testing segment demonstrated significant growth with a 40% increase in revenue and 34% increase in test volumes compared to the prior year. The company expanded its coverage policies for Nodify XL2 test, adding new agreements with Blue Shield of California, Blue Cross Blue Shield Nebraska, Centene, Fallon and Security Health Plan in Wisconsin. Despite some temporary headwinds from hurricanes in the Southeast and slower sales team expansion, management reaffirmed their 2024 full-year revenue guidance of $70-72 million and maintained their expectation to achieve adjusted EBITDA breakeven in 2H 2025.
The biopharma services segment showed promising potential with contracted revenue not yet recognized increasing to $11.1 million from $8.1 million at the end of Q2 2024. Biodesix, Inc. (NASDAQ:BDSX) continues to strengthen its commercial presence, with plans to have 70-75 fully contributing sales team members by the end of 2024 and adding 6-8 sales team members per quarter throughout 2025. BDSX is advancing its clinical evidence generation through new studies, including the CLARIFY study which will evaluate outcomes in 4,000 patients who received Nodify testing. The strong potential of these advancements is supported by significant insider purchasing activity in the last six months.
Overall, BDSX ranks 3rd on our list of penny stocks with insider buying in 2025. While we acknowledge the potential of BDSX as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than BDSX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.