Redwood City, California based Support.com (SPRT:NASDAQ)might be catching the eye of the trading community in the next few days. SPRT is the provider of online care to homes and small companies, reported lackluster earnings on July 28th, and shares came down from a day high of $4.25 to $3.26 at the close of trading on Monday, and set a 2 year low of $3.20.
Now several institutions and individual investors follow insider buying and to quote Peter Lynch: “Insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise”. Sure, insider transactions happen on a daily basis, but some stick out more than others, and at PSE, we try not to bombard or overload you with too much information.
SPRT Sticks Out!
As our subscribers know, we try to focus on penny stocks that trade under $5 and here are some simple reasons why SPRT sticks out. First of all, the company has $1.45 in cash, which makes SPRT look somewhat cheap considering it’s low share price. Secondly, as of July 15th, SPRT has 2.71 million shares short, which amount to 5.6% of the float. Please keep in mind that the number may have even increased after the post earnings sell off. Lastly, four different SPRT insiders purchased shares on July, 31st between the range of $3.28 and $3.35 to total 26,500 shares amongst them. Now the share amount is not exactly overwhelming, but the message is. Insiders often start small and average themselves into the position. SPRT President and CEO Joshua Pickus only picked up 10k shares, but it wouldn’t be a big surprise if he added to his current position of 59,400 shares. Keep in mind that confidence from management is a key catalyst in scaring shorts to cover already profitable positions. So keep an eye on SPRT, it could get interesting.
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