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Why does insider purchase matters for small companies? 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 (NYSEARCA:IWM) index outperforms the S&P 500 (NYSEARCA:SPY) significantly over the past 10 years: Russell 2000 index returns 66% vs. S&P 500 25%.

Choosing the right small companies to invest can be daunting: 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. Following Seeking Alpha's micro-cap policy, all the stocks in the table are greater 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 buy and sell 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 those transactions with a total value of less than $10,000. 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 watch list.

On this week's (4/23/2012-4/27/2012) list, the most positive companies based on the financial records are Intervest Bancshares (NASDAQ:IBCA), Jacksonville Bancorp (NASDAQ:JXSB), and Synergy Resources Corp. (NYSEMKT:SYRG).

Air T Inc (NASDAQ:AIRT) is a services company, specifically in the industry of air delivery & freight services. It has a market cap of $23.20 million. Over the past week, Air T has had one insider who purchased a total of 3,400 shares at the total value of $32,775 . Its stock price is about 2.22% off its 52-week high, usually a positive technical indicator on the company. The trading volume has been consolidating recently. The verdict: I don't think the company's overall financial record is very solid.

American Spectrum Realty Inc (NYSEMKT:AQQ) is a financial company, specifically in the industry of property management. It has a market cap of $19.14 million. Over the past week, American Spectrum Realty has had one insider who purchased a total of 214,340 shares at the total value of $919,518 . My thoughts: I don't think the company's overall financial record is very solid.

Bridge Bancorp Inc (NASDAQ:BDGE) is a financial company, specifically in the industry of regional - northeast banks. It has a market cap of $162.92 million. Over the past week, Bridge Bancorp has had one insider who purchased a total of 1,000 shares at the total value of $19,500 . Its stock price is about 12.00% off its 52-week high, usually a positive technical indicator on the company. I like Bridge Bancorp's operating margin of 36.38%, a good sign for the company's financial health. In conclusion: A lot of caution should be used while watching new progress.

Bank Mutual Corp (NASDAQ:BKMU) is a financial company, specifically in the industry of savings & loans. It has a market cap of $188.55 million. Over the past week, Bank Mutual has had one insider who purchased a total of 3,100 shares at the total value of $11,718 . Its stock price is about 16.70% off its 52-week high, usually a positive technical indicator on the company. Bank Mutual Corp has a very healthy operating margin of 22.68%. In conclusion: I don't think the company's overall financial record is very solid.

Center Bancorp Inc (NASDAQ:CNBC) is a financial company, specifically in the industry of regional - northeast banks. It has a market cap of $172.79 million. Over the past week, Center Bancorp has had one insider who purchased a total of 2,250 shares at the total value of $22,489 . Given that its price is only 8.38% off its 52-week high, the overall market sentiment appears positive. I like Center Bancorp's operating margin of 52.36%, a good sign for the company's financial health. My thoughts: It doesn't appear to be at a point of entry yet. Watch.

Hallmark Financial Services Inc (NASDAQ:HALL) is a financial company, specifically in the industry of property & casualty insurance. It has a market cap of $147.36 million. Over the past week, Hallmark Financial Services has had one insider who purchased a total of 13,573 shares at the total value of $96,136 . Given that its price is only 15.63% off its 52-week high, the overall market sentiment appears positive. The company is current losing money operationally. Its business has to turnaround for the situation to become more positive. To summarize: There are not enough positive factors to buy this company based on the insider purchase alone.

Intervest Bancshares Corp is a financial company, specifically in the industry of credit services. It has a market cap of $87.22 million. Over the past week, Intervest Bancshares has had 2 insiders who purchased a total of 30,000 shares at the total value of $119,500 . Multiple insider purchase occasions are usually a positive sign. Given that its price is only 3.64% off its 52-week high, the overall market sentiment appears positive. Based on its PEG ratio of 0.61, the stock appears undervalued. I like Intervest Bancshares's operating margin of 69.73%, a good sign for the company's financial health. To summarize: I like what I see.

Jacksonville Bancorp Inc. is a financial company, specifically in the industry of savings & loans. It has a market cap of $31.15 million. Over the past week, Jacksonville Bancorp has had 2 insiders who purchased a total of 1,038 shares at the total value of $16,561 . Multiple insider purchase occasions are usually a positive sign. Its stock price is about 0.45% off its 52-week high, usually a positive technical indicator on the company. I like Jacksonville Bancorp.'s operating margin of 33.66%, a good sign for the company's financial health. My conclusion: This is a relatively safe play.

Lynch Corp (NYSEMKT:LGL) is a technology company, specifically in the industry of scientific & technical instruments. It has a market cap of $19.08 million. Over the past week, Lynch has had one insider who purchased a total of 6,900 shares at the total value of $50,301. Lynch's price is near the bottom, at around 19.87% off its 52-week low. The trading volume has been consolidating recently. To summarize: This company appears a risky play.

Lantronix Inc (NASDAQ:LTRX) is a technology company, specifically in the industry of networking & communication devices. It has a market cap of $25.39 million. Over the past week, Lantronix has had one insider who purchased a total of 1,605,709 shares at the total value of $4,500,802 . The company is current losing money operationally. Its business has to turnaround for the situation to become more positive. The verdict: There isn't enough financial evidence to back up a bullish case for this company.

Northern Technologies International Corp (NASDAQ:NTIC) is a consumer goods company, specifically in the industry of packaging & containers. It has a market cap of $55.94 million. Over the past week, Northern Technologies International has had one insider who purchased a total of 3,000 shares at the total value of $39,123 . Northern Technologies International's price is near the bottom, at around 13.74% off its 52-week low. Based on its PEG ratio of 0.57, the stock appears undervalued. The company is current losing money operationally. Its business has to turnaround for the situation to become more positive. In conclusion: There isn't enough positive evidence for investing in this company.

Pope Resources Ltd Partnership (NASDAQ:POPE) is a industrial goods company, specifically in the industry of lumber, wood production. It has a market cap of $198.45 million. Over the past week, Pope Resources Ltd Partnership has had one insider who purchased a total of 2,000 shares at the total value of $89,692 . Its stock price is about 10.64% off its 52-week high, usually a positive technical indicator on the company. The verdict: The company has a decent dividend payout that provides a minimum margin of safety. But it is otherwise not that appealing.

Pixelworks Inc (NASDAQ:PXLW) is a technology company, specifically in the industry of semiconductor - integrated circuits. It has a market cap of $42.37 million. Over the past week, Pixelworks has had one insider who purchased a total of 5,000 shares at the total value of $11,950 . One concern is the company isn't profitable at this point. Recently, the stock is traded fairly inactively. To summarize: This company appears a risky play.

Rait Investment Trust (NYSE:RAS) is a financial company, specifically in the industry of REITs - diversified. It has a market cap of $205.02 million. Over the past week, Rait Investment Trust has had one insider who purchased a total of 75,784 shares at the total value of $352,099 . Thinning trading volume suggests that trading interest in the company is waning. My thoughts: I don't think the company's overall financial record appears to be very solid.

Retractable Technologies Inc (NYSEMKT:RVP) is a healthcare company, specifically in the industry of medical instruments & supplies. It has a market cap of $30.63 million. Over the past week, Retractable Technologies has had one insider who purchased a total of 50,000 shares at the total value of $63,500 . Its price is only around 10.00% off its 52-week low. While the stock appears it might have bottomed. Investors should proceed with caution. One concern is the company isn't profitable at this point. My conclusion: The company's overall financial situation is not yet very optimistic.

Schmitt Industries Inc (NASDAQ:SMIT) is a technology company, specifically in the industry of scientific & technical instruments. It has a market cap of $10.29 million. Over the past week, Schmitt Industries has had one insider who purchased a total of 5,000 shares at the total value of $15,750 . Its stock price is about 19.31% off its 52-week high, usually a positive technical indicator on the company. My thoughts: I'd avoid this company at this price level.

Synergy Resources Corp is a basic materials company, specifically in the industry of oil & gas equipment & services. It has a market cap of $173.90 million. Over the past week, Synergy Resources has had one insider who purchased a total of 56,631 shares at the total value of $183,155 . I like this company with an very undervalued stock reflected in a low PEG ratio. Synergy Resources Corp has a very healthy operating margin of 38.42%. The recent trading volume is below average. The verdict: The company appears attractive.

United Security Bancshares (NASDAQ:UBFO) is a financial company, specifically in the industry of regional - Pacific banks. It has a market cap of $32.32 million. Over the past week, United Security Bancshares has had one insider who purchased a total of 10,000 shares at the total value of $23,459 . One concern is the company isn't profitable at this point. In conclusion: I'd avoid this company at this price level.

Food Technology Service Inc (NASDAQ:VIFL) is a services company, specifically in the industry of business services. It has a market cap of $18.98 million. Over the past week, Food Technology Service has had one insider who purchased a total of 11,148 shares at the total value of $71,458 . Given that its price is only 16.65% off its 52-week high, the overall market sentiment appears positive. I like Food Technology Service's operating margin of 38.16%, a good sign for the company's financial health. The verdict: I don't think the company's overall financial record appears to be very solid.

Source: Notable Micro-Cap Company Insider Buys This Week