Key Points
- NN, Inc. is getting bought by a deep-value manager that focuses on challenged businesses.
- Great Elm Group is targeted by a constructive activist that targets misunderstood businesses.
- Insiders and institutions are buying Purple Innovation.
Insiders and major institutions are buying penny stocks. The names on the list today include 3 deep-value plays that offer deep-value plays for risk-tolerant investors. Among them are NN Inc. (NASDAQ: NNBR), Great Elm Group (NASDAQ: GEG), and Purple Innovation, Inc. (NASDAQ: PRPL), which provide a diversified play into the penny stock market. NN, Inc. manufactures high-precision metal components and assemblies, Great Elm Group distributes medical supplies, and Purple Innovation, Inc manufactures and distributes bedding and household items ranging from mattresses to pillows, pillowcases, and sheets.
NN, Inc Faces Temporal Challenges, Provides Opportunity
The institutions are selling NN Inc, but take that with a grain of salt. The institutions are selling but own 74% of the company, but one institution is buying, and so are the insiders. The institution buying is Corre Partners. Corre Partners is an alternative asset manager focused on deep-value opportunities in businesses that face temporal challenges.
They offer a variety of financing solutions up to and including bespoke financing or what translates are tailor-made custom financing on a case-by-case basis. Corre Partners own more than 12% of the company.
Insiders buying include 2 directors and the new CEO. The new CEO is Harold Bevis. Mr. Bevis has over 25 years of experience in the commercial auto market, which is NN, Inc.’s primary focus. The company manufactures components for the automotive, EV, and industrial markets. The company has struggled to spur growth; the new CEO is expected to help alter that condition. Shares of NNBR have been in a downtrend, but that trend ended earlier this year.
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The market hit bottom and bounced, confirming support at the 3-year low. The market may continue consolidating at this level until more news comes.
Great Elm Group, A Misunderstood Market
Great Elm Group has a new CEO and COO. The new CEO is Jason Reese; Mr. Reese has been chairman of the board since 2020 and is well-versed in the company’s operations. The point is that he and others, including directors and large institutions, are buying the stock. Mr. Reese has made over 5 purchases since the beginning of the quarter and owns more than 10% of the company. Insiders own more than 47% of the company, including large shareholders, own more than 47% of the company.
The most significant institutional buying is by Northern Right Capital Management. Northern Right Capital Management owns more than 12% of the company and may be expected to buy more. Northern Right is a constructive activist focusing on companies with good cash flow and solid balance sheets that are “misunderstood” by the market. Their activity helped put a floor in the price action and set the market up for a rebound.
Purple Innovation Is At Rock Bottom
Purple Innovation doesn’t have an activist or deep-value institution scooping up its shares, it has strong support from insiders and institutions that has total ownership running at 100% of the shares. The insiders, including significant holders, have made several transactions over the last year, all buyers, and own 48% of the stock, while the institutions own 92%. The institutions are active in 2023, ramping their purchases in Q2.
The company beat and reaffirmed guidance with the Q1 earnings report. The news was insufficient to increase the market, but solid results may provide the catalyst later in the year.
Companies in This Article:
| Company | Current Price | Price Change | Dividend Yield | P/E Ratio | Consensus Rating | Consensus Price Target |
|---|
| Great Elm Group (GEG) | $1.90 | +2.7% | N/A | -37.99 | N/A | N/A |
| Purple Innovation (PRPL) | $0.91 | +3.0% | N/A | -0.91 | Moderate Buy | $2.53 |
| NN (NNBR) | $3.69 | +0.3% | 7.59% | -3.39 | Buy | $6.00 |
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.
