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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 (5/21-5/25/2012), the most positive company based on the financial records is Community Partners Bancorp (CPBC).

Axcelis Technologies Inc (ACLS) is a technology company, specifically in the industry of semiconductor equipment & materials. It has a market cap of $120.53 million. Over the past week, Axcelis Technologies has 4 insiders who purchased a total of 84000 shares at the total value of $83710 . Multiple insider purchase occasions are usually a positive sign. Axcelis Technologies's price is near the bottom, at around 15.46% off its 52-week low. One concern is the company isn't profitable at this point. My thoughts: Despite insider purchase, I'm not very positive about the company's prospect.

Adcare Health Systems Inc (ADK) is a healthcare company, specifically in the industry of long-term care facilities. It has a market cap of $44.76 million. Over the past week, Adcare Health Systems has 2 insiders who purchased a total of 8000 shares at the total value of $30564 . Multiple insider purchase occasions are usually a positive sign. Adcare Health Systems's price is near the bottom, at around 0.30% off its 52-week low. My thoughts: There isn't enough financial evidence to backup a bullish case for this company.

Air T Inc (AIRT) is a services company, specifically in the industry of air delivery & freight services. It has a market cap of $22.63 million. Over the past week, Air T has one insider who purchased a total of 5645 shares at the total value of $52662 . Given that its price is only 6.47% off its 52-week high, the overall market sentiment appears positive. Recently, the stock is traded fairly inactively. To summarize: This company appears a risky play.

Amyris Inc. (AMRS) is a healthcare company, specifically in the industry of biotechnology. It has a market cap of $144.74 million. Over the past week, Amyris. has 4 insiders who purchased a total of 464914 shares at the total value of $1097196 . 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. The verdict: I'd avoid this company at this price level.

Analysts International Corp (ANLY) is a technology company, specifically in the industry of information technology services. It has a market cap of $19.89 million. Over the past week, Analysts International has one insider who purchased a total of 4500 shares at the total value of $17190 . My conclusion: This is likely a stock very low on my watch list.

Ampco Pittsburgh Corp (AP) is a industrial goods company, specifically in the industry of diversified machinery. It has a market cap of $163.40 million. Over the past week, Ampco Pittsburgh has 2 insiders who purchased a total of 16000 shares at the total value of $251966 . Multiple insider purchase occasions are usually a positive sign. Ampco Pittsburgh's price is near the bottom, at around 3.81% off its 52-week low. My conclusion: A lot of caution should be used while watching new progress.

Astea International Inc (ATEA) is a technology company, specifically in the industry of application software. It has a market cap of $10.74 million. Over the past week, Astea International has one insider who purchased a total of 5000 shares at the total value of $15435 . One concern is the company isn't profitable at this point. The verdict: I do not see enough evidence for establishing a position.

Aware Inc (AWRE) is a technology company, specifically in the industry of communication equipment. It has a market cap of $117.69 million. Over the past week, Aware has one insider who purchased a total of 16300 shares at the total value of $88020 . In conclusion: 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 prospect.

Build A Bear Workshop Inc (BBW) is a services company, specifically in the industry of toy & hobby stores. It has a market cap of $78.31 million. Over the past week, Build A Bear Workshop has one insider who purchased a total of 50000 shares at the total value of $234450 . Its price is only around 12.80% off its 52-week low. While the stock appears it might have bottomed. Investors should proceed with caution. My thoughts: There isn't enough financial evidence to backup a bullish case for this company.

Bcb Bancorp Inc (BCBP) is a financial company, specifically in the industry of regional - northeast banks. It has a market cap of $94.87 million. Over the past week, Bcb Bancorp has one insider who purchased a total of 1191 shares at the total value of $12640 . Its stock price is about 12.24% off its 52-week high, usually a positive technical indicator on the company. Bcb Bancorp Inc has a very healthy operating margin of 26.29%. In conclusion: I'd avoid this company at this price level.

Bg Medicine Inc. (BGMD) is a healthcare company, specifically in the industry of medical laboratories & research. It has a market cap of $85.90 million. Over the past week, Bg Medicine. has 3 insiders who purchased a total of 25008 shares at the total value of $99130 . Multiple insider purchase occasions are usually a positive sign. One concern is the company isn't profitable at this point. To summarize: I don't think the company's overall financial record to be very solid.

Bank Mutual Corp (BKMU) is a financial company, specifically in the industry of savings & loans. It has a market cap of $163.07 million. Over the past week, Bank Mutual has one insider who purchased a total of 14100 shares at the total value of $47902 . I like Bank Mutual's operating margin of 22.68%, a good sign for the company's financial health. In conclusion: I'd avoid this company at this price level.

Bsb Bancorp Inc. (BLMT) is a financial company, specifically in the industry of money center banks. It has a market cap of $113.18 million. Over the past week, Bsb Bancorp. has one insider who purchased a total of 1000 shares at the total value of $12560 . Its stock price is about 7.70% off its 52-week high, usually a positive technical indicator on the company. The recent trading volume is below average. The verdict: I see more negatives than positives in this company.

Bacterin International Holdings Inc. (BONE) is a healthcare company, specifically in the industry of biotechnology. It has a market cap of $65.76 million. Over the past week, Bacterin International Holdings. has one insider who purchased a total of 10451 shares at the total value of $16711 . Bacterin International Holdings.'s price is near the bottom, at around 16.54% 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 recent trading volume is below average. To summarize: This is likely a stock very low on my watch list.

Bassett Furniture Industries Inc (BSET) is a consumer goods company, specifically in the industry of home furnishings & fixtures. It has a market cap of $106.74 million. Over the past week, Bassett Furniture Industries has one insider who purchased a total of 3000 shares at the total value of $28953 . Given that its price is only 13.19% off its 52-week high, the overall market sentiment appears positive. The recent trading volume is below average. In conclusion: I don't think the company's overall financial record to be very solid.

Chicopee Bancorp Inc. (CBNK) is a financial company, specifically in the industry of savings & loans. It has a market cap of $73.52 million. Over the past week, Chicopee Bancorp. has one insider who purchased a total of 1000 shares at the total value of $14300 . Its stock price is about 3.07% off its 52-week high, usually a positive technical indicator on the company. Trading is fairly active with this company lately, reflected in elevated volume. My thoughts: There isn't enough positive factors to buy this company based on insider purchase alone.

Ciber Inc (CBR) is a technology company, specifically in the industry of information technology services. It has a market cap of $280.46 million. Over the past week, Ciber has one insider who purchased a total of 10000 shares at the total value of $38440 . My conclusion: I'd avoid this company at this price level.

Capital City Bank Group Inc (CCBG) is a financial company, specifically in the industry of regional - mid-Atlantic banks. It has a market cap of $116.21 million. Over the past week, Capital City Bank Group has 2 insiders who purchased a total of 4500 shares at the total value of $29665 . Multiple insider purchase occasions are usually a positive sign. Its price is only around 6.46% off its 52-week low. While the stock appears it might have bottomed. Investors should proceed with caution. My thoughts: I do not see enough evidence for establishing a position.

Cross Country Healthcare Inc (CCRN) is a services company, specifically in the industry of staffing & outsourcing services. It has a market cap of $123.88 million. Over the past week, Cross Country Healthcare has 2 insiders who purchased a total of 9252 shares at the total value of $36610 . Multiple insider purchase occasions are usually a positive sign. Its price is only around 7.18% off its 52-week low. While the stock appears it might have bottomed. Investors should proceed with caution. 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: Despite insider purchase, I'm not very positive about the company's prospect.

Clean Diesel Technologies Inc (CDTI) is a industrial goods company, specifically in the industry of pollution & treatment controls. It has a market cap of $18.98 million. Over the past week, Clean Diesel Technologies has one insider who purchased a total of 27496 shares at the total value of $55926 . One concern is the company isn't profitable at this point. Recently, the stock is traded fairly inactively. My thoughts: This company appears a risky play.

Chatham Lodging Trust (CLDT) is a financial company, specifically in the industry of REIT - hotel/motel. It has a market cap of $177.56 million. Over the past week, Chatham Lodging Trust has one insider who purchased a total of 1500 shares at the total value of $19335 . I like this company with an very undervalued stock reflected in a low PEG ratio. To summarize: There isn't enough financial evidence to backup a bullish case for this company.

Apa Enterprises Inc. (CLFD) is a technology company, specifically in the industry of communication equipment. It has a market cap of $53.06 million. Over the past week, Apa Enterprises. has one insider who purchased a total of 30000 shares at the total value of $123840 . Its price is only around 10.26% off its 52-week low. While the stock appears it might have bottomed. Investors should proceed with caution. My conclusion: The financial records of this company isn't strong enough.

Clearone Communications Inc (CLRO) is a technology company, specifically in the industry of communication equipment. It has a market cap of $34.12 million. Over the past week, Clearone Communications has one insider who purchased a total of 6850 shares at the total value of $25567 . Clearone Communications's price is near the bottom, at around 1.35% off its 52-week low. In conclusion: There isn't enough financial evidence to backup a bullish case for this company.

Casual Male Retail Group Inc (CMRG) is a services company, specifically in the industry of apparel stores. It has a market cap of $151.23 million. Over the past week, Casual Male Retail Group has one insider who purchased a total of 92310 shares at the total value of $265197 . Its price is only around 13.04% off its 52-week low. While the stock appears it might have bottomed. Investors should proceed with caution. Based on its PEG ratio of 0.79, the stock appears undervalued. The recent trading volume is below average. The verdict: This stock is OK for your watch list, but not particularly appealing based on its overall financial records.

Center Bancorp Inc (CNBC) is a financial company, specifically in the industry of regional - northeast banks. It has a market cap of $165.13 million. Over the past week, Center Bancorp has one insider who purchased a total of 11355 shares at the total value of $113886 . Given that its price is only 7.92% off its 52-week high, the overall market sentiment appears positive. I like Center Bancorp's operating margin of 53.85%, a good sign for the company's financial health. To summarize: I would watch this stock with caution.

Community Partners Bancorp (CPBC) is a financial company, specifically in the industry of regional - northeast banks. It has a market cap of $46.93 million. Over the past week, Community Partners Bancorp has 3 insiders who purchased a total of 3784 shares at the total value of $21782 . Multiple insider purchase occasions are usually a positive sign. Its stock price is about 4.84% off its 52-week high, usually a positive technical indicator on the company. I like Community Partners Bancorp's operating margin of 33.32%, a good sign for the company's financial health. Thinning trading volume suggests that trading interest in the company is waning. In conclusion: The company looks appealing.

Consumer Portfolio Services Inc (CPSS) is a financial company, specifically in the industry of credit services. It has a market cap of $39.63 million. Over the past week, Consumer Portfolio Services has one insider who purchased a total of 6657 shares at the total value of $11559 . Its stock price is about 8.48% off its 52-week high, usually a positive technical indicator on the company. One concern is the company isn't profitable at this point. In conclusion: There isn't enough financial evidence to backup a bullish case for this company.

Cryolife Inc (CRY) is a healthcare company, specifically in the industry of medical appliances & equipment. It has a market cap of $127.02 million. Over the past week, Cryolife has one insider who purchased a total of 2100 shares at the total value of $10283 . Cryolife's price is near the bottom, at around 15.25% off its 52-week low. To summarize: Despite insider purchase, I'm not very positive about the company's prospect.

Cenveo Inc (CVO) is a services company, specifically in the industry of business services. It has a market cap of $109.10 million. Over the past week, Cenveo has one insider who purchased a total of 14724 shares at the total value of $25505 . Cenveo's price is near the bottom, at around 17.81% off its 52-week low. I like this company with an very undervalued stock reflected in a low PEG ratio. Recently, the stock is traded fairly inactively. However, the financial record isn't positive enough.

Community West Bancshares (CWBC) is a financial company, specifically in the industry of regional - Pacific banks. It has a market cap of $15.09 million. Over the past week, Community West Bancshares has one insider who purchased a total of 5473 shares at the total value of $12587 . The company is current losing money operationally. Its business has to turnaround for the situation to become more positive. To summarize: There isn't enough financial evidence to backup a bullish case for this company.

Data I/o Corp (DAIO) is a technology company, specifically in the industry of diversified electronics. It has a market cap of $20.56 million. Over the past week, Data I/o has one insider who purchased a total of 3700 shares at the total value of $10323 . Data I/o's price is near the bottom, at around 11.76% off its 52-week low. One concern is the company isn't profitable at this point. The recent trading volume is below average. The verdict: I'd avoid this company at this price level.

Digirad Corp (DRAD) is a healthcare company, specifically in the industry of medical appliances & equipment. It has a market cap of $44.09 million. Over the past week, Digirad has 2 insiders who purchased a total of 32820 shares at the total value of $73680 . 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 would not buy the stock at this point.

Dynamics Research Corp (DRCO) is a technology company, specifically in the industry of business software & services. It has a market cap of $62.51 million. Over the past week, Dynamics Research has 2 insiders who purchased a total of 19515 shares at the total value of $125193 . Multiple insider purchase occasions are usually a positive sign. Dynamics Research's price is near the bottom, at around 5.01% off its 52-week low. In conclusion: A lot of caution should be used while watching new progress.

Electromed Inc. (ELMD) is a healthcare company, specifically in the industry of home health care. It has a market cap of $20.77 million. Over the past week, Electromed. has one insider who purchased a total of 9375 shares at the total value of $24806 . Electromed.'s price is near the bottom, at around 11.79% off its 52-week low. In conclusion: I do not see enough evidence for establishing a position.

Emmis Communications Corp (EMMS) is a services company, specifically in the industry of broadcasting - radio. It has a market cap of $59.75 million. Over the past week, Emmis Communications has 3 insiders who purchased a total of 316800 shares at the total value of $539193 . Multiple insider purchase occasions are usually a positive sign. Given that its price is only 13.97% off its 52-week high, the overall market sentiment appears positive. My conclusion: This stock is OK for your watch list, but not particularly appealing based on its overall financial records.

Ambassadors Group Inc (EPAX) is a services company, specifically in the industry of education & training services. It has a market cap of $89.98 million. Over the past week, Ambassadors Group has one insider who purchased a total of 39510 shares at the total value of $197330 . 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 thoughts: This is likely a stock very low on my watch list.

Hyde Park Acquisition Corp (ESSX) is a services company, specifically in the industry of rental & leasing services. It has a market cap of $83.92 million. Over the past week, Hyde Park Acquisition has one insider who purchased a total of 172000 shares at the total value of $507400 . The company is current losing money operationally. Its business has to turnaround for the situation to become more positive. In conclusion: This company appears a risky play.

First Citizens Banc Corp (FCZA) is a financial company, specifically in the industry of regional - Pacific banks. It has a market cap of $50.02 million. Over the past week, First Citizens Banc has one insider who purchased a total of 2000 shares at the total value of $13420 . Its stock price is about 8.59% off its 52-week high, usually a positive technical indicator on the company. I like First Citizens Banc's operating margin of 21.37%, a good sign for the company's financial health. My conclusion: There isn't enough positive factors to buy this company based on insider purchase alone.

Xanser Corp (FRM) is a services company, specifically in the industry of technical services. It has a market cap of $165.39 million. Over the past week, Xanser has one insider who purchased a total of 5000 shares at the total value of $21400 . Its price is only around 5.97% off its 52-week low. While the stock appears it might have bottomed. Investors should proceed with caution. 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 see more negatives than positives in this company.

Furiex Pharmaceuticals Inc. (FURX) is a services company, specifically in the industry of business services. It has a market cap of $190.03 million. Over the past week, Furiex Pharmaceuticals. has one insider who purchased a total of 2400 shares at the total value of $38760 . The company is current losing money operationally. Its business has to turnaround for the situation to become more positive. The verdict: This is likely a stock very low on my watch list.

Va Software Corp (GKNT) is a technology company, specifically in the industry of internet software & services. It has a market cap of $105.72 million. Over the past week, Va Software has 3 insiders who purchased a total of 5712 shares at the total value of $83071 . Multiple insider purchase occasions are usually a positive sign. One concern is the company isn't profitable at this point. The verdict: I would not buy the stock at this point.

Source: Notable Micro Cap Insider Buys Last Week