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Small cap companies are usually not followed by analysts, which makes choosing the right small cap (market cap < $500 million) more difficult. Choosing the right small companies to invest can be daunting. However, instead purchases provide a good starting point. Insiders, especially executives and directors of small companies, tend to know their company very well. Tracking their stock purchase activities can generate lucrative returns.

Below is a list of notable insider purchases of small-cap stocks filed at the Securities and Exchange Commission today. Following Seeking Alpha's small-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 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 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 a watch list.

AAR Corp. (NYSE:AIR) is an industrial goods company, specifically in the industry of aerospace/defense products and services. It has a market cap of $399.83 million. According to today's SEC filing, AAR has 2 insiders who purchased a total of 25,000 shares at the total value of $270,850. Multiple insider purchase occasions are usually a positive sign. Its price is only around 11.50% off its 52-week low. While the stock appears it might have bottomed, investors should proceed with caution. Based on its PEG ratio of 0.78, the stock appears undervalued. I believe AAR's operating margin of 7.32% is acceptable. The conclusion: The company has a decent dividend payout that provides a minimum margin of safety. The company looks appealing.

Basic Energy Services, Inc. (NYSE:BAS) is a basic materials company, specifically in the industry of oil and gas equipment and services. It has a market cap of $404.00 million. According to today's SEC filing, Basic Energy Services has one insider who purchased a total of 11,000 shares at the total value of $103,136. Its price is only around 7.61% off its 52-week low. While the stock appears it might have bottomed, investors should proceed with caution. Based on its PEG ratio of 0.51, the stock appears undervalued. The conclusion: It doesn't appear to be at a point of entry yet. Watch.

Guidance Software, Inc. (NASDAQ:GUID) is a technology company, specifically in the industry of application software. It has a market cap of $218.22 million. According to today's SEC filing, Guidance Software has one insider who purchased a total of 10,000 shares at the total value of $84,890. Based on its PEG ratio of 0.52, the stock appears undervalued. One concern is the company isn't profitable at this point. My conclusion: This company appears to be a risky play.

Norwood Financial Corp. (NASDAQ:NWFL) is a financial company, specifically in the industry of regional - northeast banks. It has a market cap of $91.21 million. According to today's SEC filing, Norwood Financial has one insider who purchased a total of 2,000 shares at the total value of $55,780. Given that its price is only 0.46% lower than its 52-week high, the overall market sentiment appears positive. Norwood Financial Corp. has a very healthy operating margin of 45.72%. Recently, the stock is not traded actively. My conclusion: The company has a decent dividend payout that provides a minimum margin of safety. I like what I see.

Pope Resources LP (NASDAQ:POPE) is an industrial goods company, specifically in the industry of lumber, wood production. It has a market cap of $238.22 million. According to today's SEC filing, Pope Resources has one insider who purchased a total of 1,000 shares at the total value of $53,991. Its stock price is about 2.85% below its 52-week high, usually a positive technical indicator on the company. In summary: The company has a decent dividend payout that provides a minimum margin of safety. I would not buy the stock at this point.

Harris & Harris Group, Inc. (NASDAQ:TINY) is a financial company, specifically in the industry of diversified investments. It has a market cap of $113.15 million. According to today's SEC filing, Harris & Harris Group has one insider who purchased a total of 3,000 shares at the total value of $10,932. One concern is the company isn't profitable at this point. What to do: I see more negatives than positives in this company.

ValueVision Media Inc. (VVTV) is a services company, specifically in the industry of catalog and mail order houses. It has a market cap of $89.81 million. According to today's SEC filing, ValueVision Media has one insider who purchased a total of 10,000 shares at the total value of $18,500. Its price is only around 19.58% 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. Recently, the stock is not traded actively. My thoughts: There isn't enough financial evidence to back up a bullish case for this company.

Source: Small Caps Purchased By Insiders Today