We recently published a list of 10 Cheapest Stocks Insiders Are Buying Recently. In this article, we are going to take a look at where Loop Industries, Inc. (NASDAQ:LOOP) stands against the other cheap stocks that insiders are buying recently.
Why should we be interested in affordable stocks? Some investors like to look for cheaper stocks in order to diversify their portfolios, because these penny stocks often operate in different industries than larger businesses.
Some investors’ strategy is finding nascent companies with strong growth potential, which can bring high returns once the companies have grown. Even though penny stocks often carry higher risks and are more prone to market volatility, they also offer investors more room for growth.
What are some ways to assess cheap stocks that are worth investing in? While there’s no single simple or complicated rule that investors can follow to achieve secure results, some strategies can help. One strategy is to keep track of insider trading activity. Insiders or, in other words, people in high positions within companies, such as CEOs, CFOs, directors and other executives have valuable insights into the company’s strategic moves, plans, and initiatives. A CEO’s investment in a company’s stock can sometimes signal strong confidence in the company’s future.
While both insider selling and buying can be driven by various motives, it is important to consider these moves within the broader context of the company’s fundamentals, industry trends, and overall market conditions. That’s why due diligence before any investment is of the utmost importance. However, insider trading activity in combination with other relevant determinants can offer valuable insights into a company’s capabilities, helping investors make more informed investment decisions.
What are some of the most affordable stocks insiders have been buying over the last 30 days? To find out, we used Insider Monkey’s insider trading stock screener, focusing only on stocks where at least two insiders had purchased shares recently. From there, we ranked the 10 stocks with the lowest average price per share.
Our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds, focusing on insider trading and stock picks from hedge fund investor newsletters and conferences. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
With each stock, we note the average price per share of these purchases and the stock’s market capitalization.
A huge plastic bottle manufacturing facility, showcasing the company’s proprietary processes for plastic packaging.
Loop Industries, Inc. (NASDAQ:LOOP)
Average price per share: $1.13
Market capitalization: $60.954 million
Loop Industries, Inc. (NASDAQ:LOOP) is a technology company on a mission to advance a circular plastics economy through the production of 100% recycled polyethylene terephthalate plastic and textile-to-textile polyester fiber.
In December, the company secured €10 million ($10.44) via a convertible preferred security financing with Reed Societe Generale Group, a European investment firm majority-owned by the bank Societe Generale. In addition, as part of the transaction, Loop sold its first Infinite Loop technology license, generating an initial €10 million payment, with additional milestone-based payments from Reed Societe Generale Group to follow.
In January, two insiders purchased $114,506 worth of Loop Industries, Inc. (NASDAQ:LOOP) shares at an average price of $1.13. The stock is currently trading at $1.28, having gained 6.67% year-to-date.
One Wall Street analyst has a “Buy” rating on the stock, and a 12-month price target of $5.80, which represents an increase of 353.12% from the previous price, according to data from TipRanks.
Over the last 12 months, the company’s shares declined 52.94%. While there is no analyst coverage that explains this decline in LOOP share price, it is important to mention that, usually penny stocks are notably more volatile than higher-priced, larger stocks that don’t face the same liquidity issues. However, insiders continuing to invest in Loop Industries signals the management’s confidence in the company’s future.
Overall, LOOP ranks 7th on our list of the cheapest stocks insiders are buying recently. While we acknowledge the potential of LOOP 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 LOOP but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article is originally published at Insider Monkey.
