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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, Russell 2000 index outperforms the S&P 500 significantly over the past ten 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 list (5/7/2012-5/11/2012), the most positive companies based on the financial records are Body Central and Carolina Bank Holdings.


Air T Inc (AIRT) is a services company, specifically in the industry of air delivery & freight services. It has a market cap of $23.24 million. Over the past week, Air T has one insider who purchased a total of 1900 shares at the total value of $18072 . Given that its price is only 3.94% off its 52-week high, the overall market sentiment appears positive. 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: I'd avoid this company at this price level.


Cross A T Co (ATX) is a consumer goods company, specifically in the industry of recreational goods, other. It has a market cap of $133.45 million. Over the past week, Cross A T Co has one insider who purchased a total of 1000 shares at the total value of $10750 . This company's value seems reasonable with a sub-one PEG ratio, suggesting its growth is outpacing its valuation. 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 summarize: This company appears a risky play.


Barrett Business Services Inc (BBSI) is a services company, specifically in the industry of staffing & outsourcing services. It has a market cap of $202.83 million. Over the past week, Barrett Business Services has one insider who purchased a total of 1000 shares at the total value of $20580 . Its stock price is about 3.34% off its 52-week high, usually a positive technical indicator on the company. Based on its PEG ratio of 0.72, the stock appears undervalued. My conclusion: this company doesn't seem very appealing at this price level.


Build A Bear Workshop Inc (BBW) is a services company, specifically in the industry of toy & hobby stores. It has a market cap of $80.19 million. Over the past week, Build A Bear Workshop has one insider who purchased a total of 150000 shares at the total value of $724350 . Its price is only around 18.48% off its 52-week low. While the stock appears it might have bottomed. Investors should proceed with caution. My conclusion: Despite insider purchase, I'm not very positive about the company's prospect.


BSB Bancorp Inc. (BLMT) is a financial company, specifically in the industry of money center banks. It has a market cap of $117.49 million. Over the past week, BSB Bancorp. has one insider who purchased a total of 8193 shares at the total value of $99468 . Given that its price is only 1.31% off its 52-week high, the overall market sentiment appears positive. My thoughts: There aren't enough positive factors to buy this company based on insider purchase alone.


Body Central Corp (BODY) is a services company, specifically in the industry of apparel stores. It has a market cap of $240.56 million. Over the past week, Body Central has 2 insiders who purchased a total of 2360 shares at the total value of $34415 . Multiple insider purchase occasions are usually a positive sign. Body Central's price is near the bottom, at around 4.70% off its 52-week low. Based on its PEG ratio of 0.55, the stock appears undervalued. Trading is fairly active with this company lately, reflected in elevated volume. To summarize: The company looks appealing.


Bacterin International Holdings Inc. (BONE) is a healthcare company, specifically in the industry of biotechnology. It has a market cap of $68.46 million. Over the past week, Bacterin International Holdings. has 2 insiders who purchased a total of 50000 shares at the total value of $76100 . Multiple insider purchase occasions are usually a positive sign. The company is current losing money operationally. Its business has to turnaround for the situation to become more positive. In conclusion: I would not buy the stock at this point.


Camden National Corp (CAC) is a financial company, specifically in the industry of regional - northeast banks. It has a market cap of $247.58 million. Over the past week, Camden National has one insider who purchased a total of 875 shares at the total value of $27870 . Its stock price is about 14.54% off its 52-week high, usually a positive technical indicator on the company. I like Camden National's operating margin of 48.38%, a good sign for the company's financial health. The verdict: This stock is OK for your watch list, but not particularly appealing based on its overall financial records.


Cape Bancorp Inc. (CBNJ) is a financial company, specifically in the industry of regional - northeast banks. It has a market cap of $100.65 million. Over the past week, Cape Bancorp. has one insider who purchased a total of 2000 shares at the total value of $15626 . One concern is the company isn't profitable at this point. To summarize: I see more negatives than positives in this company.


Cadiz Inc (CDZI) is a services company, specifically in the industry of business services. It has a market cap of $128.75 million. Over the past week, Cadiz has 2 insiders who purchased a total of 79000 shares at the total value of $669046 . Multiple insider purchase occasions are usually a positive sign. The company is current losing money operationally. Its business has to turnaround for the situation to become more positive. To summarize: I do not see enough evidence for establishing a position.


Carolina Bank Holdings Inc (CLBH) is a financial company, specifically in the industry of regional - mid-Atlantic banks. It has a market cap of $20.32 million. Over the past week, Carolina Bank Holdings has one insider who purchased a total of 2518 shares at the total value of $14881 . Its stock price is about 6.40% off its 52-week high, usually a positive technical indicator on the company. I like Carolina Bank Holdings's operating margin of 27.27%, a good sign for the company's financial health. Trading is fairly active with this company lately, reflected in elevated volume. To summarize: This is a relatively safe play.


Community West Bancshares (CWBC) is a financial company, specifically in the industry of regional - Pacific banks. It has a market cap of $13.18 million. Over the past week, Community West Bancshares has 2 insiders who purchased a total of 7500 shares at the total value of $17094 . Multiple insider purchase occasions are usually a positive sign. One concern is the company isn't profitable at this point. 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 verdict: This company appears a risky play.


Data I/O Corp (DAIO) is a technology company, specifically in the industry of diversified electronics. It has a market cap of $21.64 million. Over the past week, Data I/O has one insider who purchased a total of 6400 shares at the total value of $17728 . Data I/O's price is near the bottom, at around 17.65% off its 52-week low. The company is current losing money operationally. Its business has to turnaround for the situation to become more positive. The verdict: Despite insider purchase, I'm not very positive about the company's prospect.


Ducommun Inc (DCO) is a industrial goods company, specifically in the industry of aerospace/defense products & services. It has a market cap of $99.35 million. Over the past week, Ducommun has 3 insiders who purchased a total of 18000 shares at the total value of $169509 . Multiple insider purchase occasions are usually a positive sign. Ducommun's price is near the bottom, at around 5.38% off its 52-week low. The sub-one PEG ratio suggests it's somewhat under valued. My thoughts: I'm not very keen about the company as a potential investment target.


Digirad Corp (DRAD) is a healthcare company, specifically in the industry of medical appliances & equipment. It has a market cap of $43.71 million. Over the past week, Digirad has 2 insiders who purchased a total of 8625 shares at the total value of $19405 . Multiple insider purchase occasions are usually a positive sign. One concern is the company isn't profitable at this point. My thoughts: I do not see enough evidence for establishing a position.


Datawatch Corp (DWCH) is a technology company, specifically in the industry of business software & services. It has a market cap of $74.34 million. Over the past week, Datawatch has 2 insiders who purchased a total of 10000 shares at the total value of $122500 . Multiple insider purchase occasions are usually a positive sign. To summarize: This company appears a risky play.


Ambassadors Group Inc (EPAX) is a services company, specifically in the industry of education & training services. It has a market cap of $88.58 million. Over the past week, Ambassadors Group has one insider who purchased a total of 14701 shares at the total value of $73475 . The trading volume has been consolidating recently. To summarize: This is likely a stock very low on my watch list.

First Citizens Banc Corp (FCZA) is a financial company, specifically in the industry of regional - Pacific banks. It has a market cap of $51.08 million. Over the past week, First Citizens Banc has 2 insiders who purchased a total of 2919 shares at the total value of $19876 . Multiple insider purchase occasions are usually a positive sign. Its stock price is about 6.62% off its 52-week high, usually a positive technical indicator on the company. I like First Citizens Banc's operating margin of 20.14%, a good sign for the company's financial health. My conclusion: This stock is OK for your watch list, but not particularly appealing based on its overall financial records.


FedFirst Financial Corp (FFCO) is a financial company, specifically in the industry of savings & loans. It has a market cap of $40.26 million. Over the past week, FedFirst Financial has one insider who purchased a total of 1000 shares at the total value of $14356 . Given that its price is only 14.55% off its 52-week high, the overall market sentiment appears positive. FedFirst Financial Corp has a very healthy operating margin of 21.48%. The recent trading volume is below average. The verdict: There isn't enough financial evidence to backup a bullish case for this company.

Xanser Corp (FRM) is a services company, specifically in the industry of technical services. It has a market cap of $167.25 million. Over the past week, Xanser has 2 insiders who purchased a total of 7500 shares at the total value of $33000 . Multiple insider purchase occasions are usually a positive sign. Its price is only around 5.65% off its 52-week low. While the stock appears it might have bottomed. Investors should proceed with caution. The verdict: It doesn't appear to be at a point of entry yet. Watch.

Gevo Inc. (GEVO) is a basic materials company, specifically in the industry of chemicals - major diversified. It has a market cap of $184.28 million. Over the past week, Gevo has one insider who purchased a total of 2600 shares at the total value of $20020 . One concern is the company isn't profitable at this point. My conclusion: This company appears a risky play.

Horizon Bancorp (HBNC) is a financial company, specifically in the industry of regional - northeast banks. It has a market cap of $130.04 million. Over the past week, Horizon Bancorp has one insider who purchased a total of 542 shares at the total value of $13907 . Given that its price is only 2.22% off its 52-week high, the overall market sentiment appears positive. Horizon Bancorp has a very healthy operating margin of 32.59%. My conclusion: A lot of caution should be used while watching new progress.

Hickory Tech Corp (HTCO) is a technology company, specifically in the industry of telecom services - domestic. It has a market cap of $133.17 million. Over the past week, Hickory Tech has one insider who purchased a total of 4000 shares at the total value of $39980 . To summarize: This company appears a risky play.

Imation Corp (IMN) is a technology company, specifically in the industry of data storage devices. It has a market cap of $216.38 million. Over the past week, Imation has one insider who purchased a total of 1750 shares at the total value of $10307 . Imation's price is near the bottom, at around 6.85% off its 52-week low. One concern is the company isn't profitable at this point. The verdict: I do not see enough evidence for establishing a position.

Lakeland Bancorp Inc (LBAI) is a financial company, specifically in the industry of regional - northeast banks. It has a market cap of $244.28 million. Over the past week, Lakeland Bancorp has one insider who purchased a total of 10000 shares at the total value of $89600 . Given that its price is only 15.17% off its 52-week high, the overall market sentiment appears positive. I like Lakeland Bancorp's operating margin of 34.20%, a good sign for the company's financial health. My conclusion: I would watch this stock with caution.

Lydall Inc (LDL) is a conglomerates company, specifically in the industry of conglomerates. It has a market cap of $214.73 million. Over the past week, Lydall has one insider who purchased a total of 10000 shares at the total value of $111400 . Given that its price is only 2.18% off its 52-week high, the overall market sentiment appears positive. My conclusion: I'd avoid this company at this price level.

Macatawa Bank Corp (MCBC) is a financial company, specifically in the industry of regional - Midwest banks. It has a market cap of $93.43 million. Over the past week, Macatawa Bank has one insider who purchased a total of 11000 shares at the total value of $37301 . Given that its price is only 5.74% off its 52-week high, the overall market sentiment appears positive. I like Macatawa Bank's operating margin of 39.04%, a good sign for the company's financial health. My conclusion: I may put it on my watch list, but definitely not on top of the list.

Maxwell Technologies Inc (MXWL) is a technology company, specifically in the industry of diversified electronics. It has a market cap of $253.71 million. Over the past week, Maxwell Technologies has 3 insiders who purchased a total of 12000 shares at the total value of $114950 . Multiple insider purchase occasions are usually a positive sign. Its price is only around 1.74% off its 52-week low. While the stock appears it might have bottomed. Investors should proceed with caution. My conclusion: I do not see enough evidence for establishing a position.

Novatel Wireless Inc (NVTL) is a technology company, specifically in the industry of diversified communication services. It has a market cap of $72.34 million. Over the past week, Novatel Wireless has one insider who purchased a total of 100000 shares at the total value of $198000 . Novatel Wireless's price is near the bottom, at around 14.87% off its 52-week low. One concern is the company isn't profitable at this point. My conclusion: I would not buy the stock at this point.

Source: Notable Micro Cap Company Insider Buys Last Week