Notable Micro Cap Insider Buys Last Week
Why does insider buying matter for small companies? It matters because small companies often have no analysts following them. This means choosing the right micro-cap (market cap < $300 million) can be very profitable. In fact, the Russell 2000 index has outperformed the S&P 500 significantly over the past ten years, with the Russell 2000 index returning 66% vs. 25% for the S&P 500.
Choosing the right small companies to invest in can be daunting, so where should you start? Insiders, especially executives and directors of small companies tend to know their company very well. Tracking their stock purchase activities is a very good point to start for lucrative returns.
Below is a list of notable insider purchases of micro-cap stocks (market cap <$300 million) during the past week, filed at the Securities and Exchange Commission. In line with Seeking Alpha's micro-cap policy, all the stocks in the table are greater in value than $1 per share or $100 million market cap.
I have written a short analysis of each company's financial records. However, these are not buying and selling recommendations. It is also important to pay attention to how much the insiders buy, especially with respect to the size of their company and their regular income. I have filtered out transactions with a total value of less than $20,000.
As Peter Lynch pointed out in his book, One Up On Wall Street, insiders sell for various reasons, which is usually not very informative unless they are dumping shares like there is no tomorrow. Insiders buy for one reason: they are signaling that they have confidence in the company's future performance. Of course, insiders could be wrong. It is nevertheless a good starting point to add those stocks to the watch list.
On this week's list (6/4/2012 to 6/8/2012), the most positive companies based on the financial records are Bank Of South Carolina, China Automotive Systems, Calamos Asset Management, and Merchants Bancshares.
Cambium Learning Group Inc. (ABCD) is a services company, operating specifically in the industry of education & training services. It has a market cap of $68.89 million. Over the past week, Cambium Learning Group had one insider who purchased a total of 76,999 shares at a total value of $96,248. In summary: Despite insider purchase, I'm not very positive about the company's prospect.
Ares Commercial Real Estate Corp (ACRE) is a financial company, specifically in the industry of REIT - diversified. It has a market cap of $159.95 million. Over the past week, Ares Commercial Real Estate had two insiders who purchased a total of 14,100 shares at the total value of $236,521. Multiple insider purchase occasions are usually a positive sign. Given that the price is only 4.15% lower than its 52-week high, the overall market sentiment appears positive.
I like Ares Commercial Real Estate's operating margin of 51.44%, a good sign for the company's financial health. Low recent trading volume can be negative or positive. It can be negative because it will be difficult for people to discover this micro-cap. It can be positive because ignored stocks tend to be undervalued. In conclusion: This stock is okay for your watch list, but not particularly appealing based on its overall financial records.
A. H. Belo Corp (AHC) is a services company, specifically in the industry of publishing - newspapers. It has a market cap of $83.65 million. Over the past week, A. H. Belo had one insider who purchased a total of 7,000 shares at the total value of $28,139. Its price is near the bottom, at around 0.26% off its 52-week low. In summary: There isn't enough financial evidence to back up a bullish case for this company.
American Pacific Corp (APFC) is a basic materials company, specifically in the industry of specialty chemicals. It has a market cap of $69.42 million. Over the past week, American Pacific had one insider whopurchased a total of 49,933 shares at the total value of $449,347. Given that the price is only 8.63% lower than the 52-week high, the overall market sentiment appears positive. Over the past ten days, American Pacific has seen significantly higher-than-average trading volume. My conclusion: I see more negatives than positives in this company.
America First Tax Exempt Investors LP (ATAX) is a financial company, specifically in the industry of mortgage investment. It has a market cap of $156.33 million. Over the past week, America First Tax Exempt Investors had two insiders who purchased a total of 69,325 shares at a total value of $354,240. Multiple insider purchase occasions are usually a positive sign. Given that its price is only 12.48% lower than its 52-week high, the overall market sentiment appears positive.
The company is currently losing money operationally. Its business has to turnaround for the situation to become more positive. Trading has been fairly active in this company lately, reflected in elevated volume. To conclude: I may put it on my watch list, but definitely not on top of the list.
Build A Bear Workshop Inc (BBW) is a services company, specifically in the industry of toy & hobby stores. It has a market cap of $69.59 million. Over the past week, Build A Bear Workshop had one insider whopurchased a total of 20,000 shares at the total value of $89,060. Its price is only around 1.44% off its 52-week low. While the stock appears to have bottomed, investors should proceed with caution. My verdict: I do not see enough evidence for establishing a position.
Biocryst Pharmaceuticals Inc (BCRX) is a healthcare company, specifically in the industry of biotechnology. It has a market cap of $174.55 million. Over the past week, Biocryst Pharmaceuticals had one insider who purchased a total of 20,000 shares at the total value of $63,680. One concern is the company isn't profitable at this point. In summary: Despite insider purchase, I'm not very positive about the company's prospect.
Bank Of South Carolina Corp (BKSC) is a financial company, specifically in the industry of regional - mid-Atlantic banks. It has a market cap of $49.24 million. Over the past week, Bank Of South Carolina had four insiders who purchased a total of 12,084 shares at the total value of $137,876. Multiple insider purchase occasions are usually a positive sign. Its stock price is about 8.05% below its 52-week high, usually a positive technical indicator on the company. Bank Of South Carolina Corp has a very healthy operating margin of 37.61%. In conclusion: I would put this company on my watch list.
Bank Of Kentucky Financial Corp (BKYF) is a financial company, specifically in the industry of regional - southeast banks. It has a market cap of $182.57 million. Over the past week, Bank Of Kentucky Financial had one insider who purchased a total of 1,534 shares at the total value of $36,145. Its stock price is about 14.18% below its 52-week high, usually a positive technical indicator on the company. I like Bank Of Kentucky Financial's operating margin of 39.60%, a good sign for the company's financial health. To summarize: A lot of caution should be used while watching for new progress.
BSB Bancorp Inc. (BLMT) is a financial company, specifically in the industry of money center banks. It has a market cap of $113.64 million. Over the past week, BSB Bancorp had one insider who purchased a total of 8,200 shares at the total value of $98,695. Given that its price is only 7.33% lower than its 52-week high, the overall market sentiment appears positive. The final words: This is likely a stock very low on my watch list.
China Automotive Systems Inc (CAAS) is a consumer goods company, specifically in the industry of auto parts. It has a market cap of $118.13 million. Over the past week, China Automotive Systems had two insiders who purchased a total of 43,000 shares at the total value of $176,732. Multiple insider purchase occasions are usually a positive sign.
I like this company as an undervalued stock, reflected in a low PEG ratio. Low recent trading volume can be negative or positive. It can be negative because it will be difficult for people to discover this micro-cap. It can be positive because ignored stocks tend to be undervalued. My conclusion: I like what I see.
China Biologic Products Inc. (CBPO) is a healthcare company, specifically in the industry of biotechnology. It has a market cap of $257.29 million. Over the past week, China Biologic Products has one insider who purchased a total of 1,608,363 shares at the total value of $20,104,537. Its stock price is about 15.97% below its 52-week high, usually a positive technical indicator on the company. I like China Biologic Products' operating margin of 36.95%, a good sign for the company's financial health. The recent trading volume is below average. My verdict: I do not see enough evidence for establishing a position.
Chemung Financial Corp (CHMG) is a financial company, specifically in the industry of regional - Pacific banks. It has a market cap of $114.58 million. Over the past week, Chemung Financial had one insider whopurchased a total of 11,900 shares at the total value of $300,475. Given that its price is only 3.65% lower than its 52-week high, the overall market sentiment appears positive.
I like Chemung Financial's operating margin of 33.89%, a good sign for the company's financial health. Thinning trading volume suggests that trading interest in the company is waning. My thoughts: It doesn't appear to be at a point of entry yet. Watch.
Calamos Asset Management Inc. (CLMS) is a financial company, specifically in the industry of asset management. It has a market cap of $233.86 million. Over the past week, Calamos Asset Management had 5 insiders who purchased a total of 3,345 shares at the total value of $35,614. Multiple insider purchase occasions are usually a positive sign. I like Calamos Asset Management's operating margin of 38.64%, a good sign for the company's financial health. To conclude: The company looks appealing.
Cytrx Corp (CYTR) is a healthcare company, specifically in the industry of biotechnology. It has a market cap of $79.94 million. Over the past week, Cytrx had one insider who purchased a total of 452,929 shares at the total value of $1,664,807. One concern is the company isn't profitable at this point. The verdict: There isn't enough financial evidence to back up a bullish case for this company.
Delcath Systems Inc (DCTH) is a healthcare company, specifically in the industry of drug delivery. It has a market cap of $74.14 million. Over the past week, Delcath Systems had 6 insiders who purchased a total of 196,667 shares at a total value of $294,609. Multiple insider purchase occasions are usually a positive sign. The share price is only around 4.93% off its 52-week low. While the stock appears to have bottomed, investors should proceed with caution. In summary: This company isn't very appealing financially.
Ambassadors Group Inc (EPAX) is a services company, specifically in the industry of education & training services. It has a market cap of $89.81 million. Over the past week, Ambassadors Group had one insider who purchased a total of 47,731 shares at the total value of $234,936. To summarize: I do not see enough evidence for establishing a position.
Crexendo Inc. (EXE) is a technology company, specifically in the industry of internet service providers. It has a market cap of $39.20 million. Over the past week, Crexendo had one insider who purchased a total of 94,000 shares at a total value of $338,200. The company is currently losing money operationally. Its business has to turnaround for the situation to become more positive. To summarize: I would not buy the stock at this point.
Furiex Pharmaceuticals Inc. (FURX) is a services company, specifically in the industry of business services. It has a market cap of $185.85 million. Over the past week, Furiex Pharmaceuticals had one insider whopurchased a total of 50,319 shares at a total value of $992,290. The company is currently losing money operationally. Its business has to turnaround for the situation to become more positive. In conclusion: There aren't enough positive factors to buy this company based on insider purchase alone.
Geeknet Inc. (GKNT) is a technology company, specifically in the industry of internet software & services. It has a market cap of $111.82 million. Over the past week, Geeknet had 4 insiders who purchased a total of 14,400 shares at a total value of $253,919. Multiple insider purchase occasions are usually a positive sign. One concern is the company isn't profitable at this point. In summary: I do not see enough evidence for establishing a position.
Compressco Partners LP (GSJK) is a basic materials company, specifically in the industry of oil & gas equipment & services. It has a market cap of $199.36 million. Over the past week, Compressco Partners had one insider who purchased a total of 6,560 shares at a total value of $85,205. Its price is near the bottom, at around 9.36% off its 52-week low. Recently, the stock has not been traded actively. In summary: The company has a decent dividend payout that provides a minimum margin of safety. Despite insider purchase, I'm not very positive about the company's prospects.
Mercator Partners Acquisition Corp. (GTLT) is a technology company, specifically in the industry of diversified communication services. It has a market cap of $39.92 million. Over the past week, Mercator Partners Acquisition had one insider who purchased a total of 16,600 shares at a total value of $35,690. Its stock price is about 11.72% below its 52-week high, usually a positive technical indicator on the company. Over the past ten days, Mercator Partners Acquisition has seen significantly higher than average trading volume. The conclusion: This is likely a stock very low on my watch list.
Guidance Software Inc. (GUID) is a technology company, specifically in the industry of application software. It has a market cap of $203.31 million. Over the past week, Guidance Software had one insider whopurchased a total of 50,000 shares at the total value of $395,050. Based on its PEG ratio of 0.53, the stock appears undervalued. One concern is the company isn't profitable at this point. What to do: I would not buy the stock at this point.
Goldfield Corp (GV) is an industrial goods company, specifically in the industry of heavy construction. It has a market cap of $48.36 million. Over the past week, Goldfield had one insider who purchased a total of 97,000 shares at the total value of $142,386. Given that its price is only 4.04% lower than its 52-week high, the overall market sentiment appears positive. To summarize: I would not buy the stock at this point.
Handy and Harman Ltd (HNH) is an industrial goods company, specifically in the industry of industrial equipment & components. It has a market cap of $175.30 million. Over the past week, Handy and Harman had one insider who purchased a total of 10,359 shares at the total value of $133,565. The conclusion: Despite insider purchase, I'm not very positive about the company's prospect.
Hallador Energy Company (HNRG) is a basic materials company, specifically in the industry of nonmetallic mineral mining. It has a market cap of $226.24 million. Over the past week, Hallador had one insider whopurchased a total of 6,305 shares at a total value of $42,243. I like Hallador Petroleum Co's operating margin of 27.10%, a good sign for the company's financial health. Low recent trading volume can be negative or positive. It can be negative because it will be difficult for people to discover this micro-cap. It can be positive because ignored stocks tend to be undervalued. The conclusion: This stock is okay for your watch list, but not particularly appealing based on its overall financial records.
Summit Hotel Properties Inc. (INN) is a financial company, specifically in the industry of real estate development. It has a market cap of $250.76 million. Over the past week, Summit Hotel Properties had one insider who purchased a total of 3,883 shares at a total value of $99,986. Low recent trading volume can be negative or positive. It can be negative because it will be difficult for people to discover this micro-cap. It can be positive because ignored stocks tend to be undervalued. To conclude: I do not see enough evidence for establishing a position.
Insmed Inc (INSM) is a healthcare company, specifically in the industry of biotechnology. It has a market cap of $90.54 million. Over the past week, Insmed had one insider who purchased a total of 7,500 shares at a total value of $21,787. The company is currently losing money operationally. Its business has to turnaround for the situation to become more positive. My conclusion: I don't think the company's overall financial record to be very solid.
Identive Group Inc (INVE) is a technology company, specifically in the industry of computer peripherals. It has a market cap of $59.48 million. Over the past week, Identive had one insider who purchased a total of 60,000 shares at a total value of $70,380. Its price is only around 9.89% off its 52-week low. While the stock appears it might have bottomed. Investors should proceed with caution. The company is currently losing money operationally. Its business has to turnaround for the situation to become more positive. Over the past ten days, Scm Microsystems has seen significantly higher than average trading volume. In conclusion: This is likely a stock very low on my watch list.
Isramco Inc (ISRL) is a basic materials company, specifically in the industry of independent oil & gas. It has a market cap of $245.10 million. Over the past week, Isramco had one insider who purchased a total of 3,700 shares at the total value of $286,558. Its stock price is about 7.80% below its 52-week high, usually a positive technical indicator on the company. The final words: This is not a particularly attractive company financially.
Lantronix Inc (LTRX) is a technology company, specifically in the industry of networking & communication devices. It has a market cap of $26.63 million. Over the past week, Lantronix had one insider whopurchased a total of 45,000 shares at a total value of $90,000. The company is currently losing money operationally. Its business has to turnaround for the situation to become more positive. The recent trading volume is below average. What to do: I see more negatives than positives in this company.
Luby's Inc (LUB) is a services company, specifically in the industry of restaurants. It has a market cap of $162.02 million. Over the past week, Luby's had one insider who purchased a total of 17,309 shares at the total value of $87,553. Its stock price is about 15.44% below its 52-week high, usually a positive technical indicator on the company. What to do: I see more negatives than positives in this company.
Middleburg Financial Corp (MBRG) is a financial company, specifically in the industry of regional - mid-Atlantic banks. It has a market cap of $115.09 million. Over the past week, Middleburg Financial had one insider who purchased a total of 27,595 shares at the total value of $434,620. Given that its price is only 6.11% lower than its 52-week high, the overall market sentiment appears positive. The verdict: I don't think the company's overall financial record to be very solid.
Merchants Bancshares Inc (MBVT) is a financial company, specifically in the industry of regional - northeast banks. It has a market cap of $167.98 million. Over the past week, Merchants Bancshares had one insider who purchased a total of 1,000 shares at the total value of $26,738. Its stock price is about 10.65% below its 52-week high, usually a positive technical indicator on the company. I like Merchants Bancshares' operating margin of 33.79%, a good sign for the company's financial health. The verdict: The company has a decent dividend payout that provides a minimum margin of safety. The company looks appealing.
Nanosphere Inc (NSPH) is a healthcare company, specifically in the industry of medical instruments & supplies. It has a market cap of $86.12 million. Over the past week, Nanosphere had one insider who purchased a total of 431,400 shares at a total value of $750,796. Its stock price is about 18.26% below its 52-week high, usually a positive technical indicator on the company. The company is currently losing money operationally. Its business has to turn around for the situation to become more positive. In conclusion: This company appears a risky play.
Palomar Medical Technologies Inc (PMTI) is a healthcare company, specifically in the industry of medical appliances & equipment. It has a market cap of $165.81 million. Over the past week, Palomar Medical Technologies had one insider who purchased a total of 9,600 shares at a total value of $38,323. The company is currently losing money operationally. Its business has to turnaround for the situation to become more positive. The final words: I do not see enough evidence for establishing a position.
Phoenix Companies Inc (PNX) is a financial company, specifically in the industry of life insurance. It has a market cap of $205.85 million. Over the past week, Phoenix had one insider who purchased a total of 65,000 shares at a total value of $99,450. I like this company with an undervalued stock, reflected in a low PEG ratio. My thoughts: I would not buy the stock at this point.
Pope Resources Ltd Partnership (POPE) is an industrial goods company, specifically in the industry of lumber, wood production. It has a market cap of $227.15 million. Over the past week, Pope Resources had one insider who purchased a total of 1,916 shares at a total value of $95,192. Its stock price is about 0.92% below its 52-week high, usually a positive technical indicator on the company. To conclude: The company has a decent dividend payout that provides a minimum margin of safety. I don't think the company's overall financial record to be very solid.
Providence Service Corp (PRSC) is a healthcare company, specifically in the industry of specialized health services. It has a market cap of $191.74 million. Over the past week, Providence Service has one insider who purchased a total of 200,960 shares at a total value of $2,752,564. Its stock price is about 7.65% below its 52-week high, usually a positive technical indicator on the company. In summary: There isn't enough financial evidence to back up a bullish case for this company.
Pacific Sunwear Of California Inc (PSUN) is a services company, specifically in the industry of apparel stores. It has a market cap of $112.19 million. Over the past week, Pacific Sunwear Of California had one insider who purchased a total of 50,000 shares at a total value of $77,500. One concern is the company isn't profitable at this point. The conclusion: Despite insider purchase, I'm not very positive about the company's prospect.
RAIT Investment Trust (RAS) is a financial company, specifically in the industry of REIT - diversified. It has a market cap of $215.57 million. Over the past week, RAIT Investment Trust had one insider who purchased a total of 15,180 shares at a total value of $60,903. My conclusion: This is likely a stock very low on my watch list.
Golf Two Inc (RLGT) is a services company, specifically in the industry of air delivery & freight services. It has a market cap of $60.80 million. Over the past week, Golf Two had one insider who purchased a total of 28,500 shares at a total value of $50,490. Its price is only around 8.19% off its 52-week low. While the stock appears it might have bottomed. Investors should proceed with caution. My conclusion: There aren't enough positive factors to buy this company based on insider purchase alone.
Rockwell Medical Technologies Inc (RMTI) is a healthcare company, specifically in the industry of medical appliances & equipment. It has a market cap of $197.93 million. Over the past week, Rockwell Medical Technologies had one insider who purchased a total of 6,000 shares at the total value of $52,632. The company is currently losing money operationally. Its business has to turnaround for the situation to become more positive. The final words: I don't think the company's overall financial record to be very solid.
Sonic Foundry Inc (SOFO) is a technology company, specifically in the industry of application software. It has a market cap of $27.39 million. Over the past week, Sonic Foundry has one insider who purchased a total of 19,114 shares at the total value of $135,709. Its price is near the bottom, at around 6.12% off its 52-week low. To conclude: Despite insider purchase, I'm not very positive about the company's prospect.
Leather Factory Inc (TLF) is a consumer goods company, specifically in the industry of textile - apparel footwear & accessories. It has a market cap of $52.30 million. Over the past week, Leather Factory has one insider who purchased a total of 6,800 shares at the total value of $33,967. Its stock price is about 5.50% below its 52-week high, usually a positive technical indicator on the company. What to do: I do not see enough evidence for establishing a position.
Alloy Products Inc (USAP) is a basic materials company, specifically in the industry of steel & iron. It has a market cap of $287.74 million. Over the past week, Alloy Products has one insider who purchased a total of 31,117 shares at the total value of $1,245,278. The verdict: I do not see enough evidence for establishing a position.
US Energy Corp (USEG) is a basic materials company, specifically in the industry of independent oil & gas. It has a market cap of $62.33 million. Over the past week, US Energy had two insiders who purchased a total of 12,000 shares at the total value of $27,230. Multiple insider purchase occasions are usually a positive sign. One concern is the company isn't profitable at this point. The conclusion: There isn't enough financial evidence to make a bullish case for this company.
By Gutone
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Source: seekingalpha.com
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