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Why do insider purchases matter 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 index outperformed 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 in 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 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 $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, the most positive company based on the financial records is Ambassadors Group (NASDAQ:EPAX).

Arbor Realty Trust Inc. (NYSE:ABR) is a financial company, specifically in the industry of REIT - diversified. It has a market cap of $124.40 million. Over the past week, Arbor Realty Trust has 2 insiders who purchased a total of 50,000 shares at the total value of $255,970. Multiple insider purchase occasions are usually a positive sign. The company is currently losing money operationally. Its business has to turn around for the situation to become more positive. My thoughts: The company has a decent dividend payout that provides a minimum margin of safety. This stock is OK for your watch list, but not particularly appealing based on its overall financial records.

AM Castle & Co. (NYSE:CAS) is an industrial goods company, specifically in the industry of metal fabrication. It has a market cap of $241.45 million. Over the past week, AM Castle & Co. has one insider who purchased a total of 2,500 shares at the total value of $24,400. The recent trading volume is below average. What to do: I would not buy the stock at this point.

CompX International Inc. (NYSEMKT:CIX) is an industrial goods company, specifically in the industry of machine tools & accessories. It has a market cap of $159.78 million. Over the past week, CompX International has 2 insiders who purchased a total of 3,040 shares at the total value of $33,305. Multiple insider purchase occasions are usually a positive sign. Its price is near the bottom, at around 15.23% off its 52-week low. My thoughts: The company has a decent dividend payout that provides a minimum margin of safety. This stock is OK for your watch list, but not particularly appealing based on its overall financial records.

CytRx Corporation (NASDAQ:CYTR) is a healthcare company, specifically in the industry of biotechnology. It has a market cap of $103.68 million. Over the past week, CytRx has one insider who purchased a total of 35,648 shares at the total value of $150,647. Its stock price is about 15.32% below 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: This company appears a risky play.

EnerNOC, Inc. (NASDAQ:ENOC) is a services company, specifically in the industry of business services. It has a market cap of $169.96 million. Over the past week, EnerNOC has one insider who purchased a total of 4,000 shares at the total value of $24,640. Its price is only around 18.30% 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. The conclusion: Despite insider purchase, I'm not very positive about the company's prospect.

Furiex Pharmaceuticals, Inc. (NASDAQ:FURX) is a services company, specifically in the industry of business services. It has a market cap of $212.01 million. Over the past week, Furiex Pharmaceuticals has one insider who purchased a total of 34,133 shares at the total value of $649,892. Its stock price is about 14.68% below its 52-week high, usually a positive technical indicator on the company. One concern is the company isn't profitable at this point. The conclusion: I would not buy the stock at this point.

Geeknet, Inc. (NASDAQ:GKNT) is a technology company, specifically in the industry of internet software & services. It has a market cap of $116.57 million. Over the past week, Geeknet has one insider who purchased a total of 1,567 shares at the total value of $27,344. The company is currently losing money operationally. Its business has to turnaround for the situation to become more positive. The trading volume has been consolidating recently. My thoughts: I see more negatives than positives in this company.

Guidance Software, Inc. (NASDAQ:GUID) is a technology company, specifically in the industry of application software. It has a market cap of $232.88 million. Over the past week, Guidance Software has one insider who purchased a total of 10,000 shares at the total value of $84,890. One concern is the company isn't profitable at this point. What to do: I see more negatives than positives in this company.

Gyrodyne Co. of America Inc. (NASDAQ:GYRO) is a financial company, specifically in the industry of property management. It has a market cap of $169.51 million. Over the past week, Gyrodyne Co. of America has one insider who purchased a total of 500 shares at the total value of $56,500. Its stock price is about 0.68% below its 52-week high, usually a positive technical indicator on the company. In summary: This company appears a risky play.

Handy & Harman Ltd. (NASDAQ:HNH) is an industrial goods company, specifically in the industry of industrial equipment & components. It has a market cap of $175.43 million. Over the past week, Handy & Harman Ltd. has one insider who purchased a total of 5,897 shares at the total value of $75,404. In summary: This company appears a risky play.

Insmed Incorporated (NASDAQ:INSM) is a healthcare company, specifically in the industry of biotechnology. It has a market cap of $76.86 million. Over the past week, Insmed has one insider who purchased a total of 19,936 shares at the total value of $59,808. Its price is near the bottom, at around 18.56% off its 52-week low. The company is currently losing money operationally. Its business has to turnaround for the situation to become more positive. My conclusion: Despite insider purchase, I'm not very positive about the company's prospect.

Ladenburg Thalmann Financial Services Inc. (NYSEMKT:LTS) is a financial company, specifically in the industry of investment brokerage - national. It has a market cap of $283.24 million. Over the past week, Ladenburg Thalmann Financial Services has 2 insiders who purchased a total of 15,000 shares at the total value of $22,250. Multiple insider purchase occasions are usually a positive sign. The final words: I see more negatives than positives in this company.

Neogenomics Inc. (NGNM) is a healthcare company, specifically in the industry of medical laboratories & research. It has a market cap of $74.92 million. Over the past week, Neogenomics has one insider who purchased a total of 84,037 shares at the total value of $141,860. Given that its price is only 9.24% lower than its 52-week high, the overall market sentiment appears positive. To summarize: I'd avoid this company at this price level.

Nanosphere, Inc. (NASDAQ:NSPH) is a healthcare company, specifically in the industry of medical instruments & supplies. It has a market cap of $85.68 million. Over the past week, Nanosphere has one insider who purchased a total of 309,075 shares at the total value of $627,131. Given that its price is only 19.50% lower than its 52-week high, the overall market sentiment appears positive. One concern is the company isn't profitable at this point. My conclusion: I do not see enough evidence for establishing a position.

Novatel Wireless Inc. (NASDAQ:NVTL) is a technology company, specifically in the industry of diversified communication services. It has a market cap of $75.17 million. Over the past week, Novatel Wireless has one insider who purchased a total of 50,000 shares at the total value of $119,350. Its price is only around 18.97% 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. To conclude: There isn't enough financial evidence to back up a bullish case for this company.

Norwood Financial Corp. (NASDAQ:NWFL) is a financial company, specifically in the industry of regional - northeast banks. It has a market cap of $90.04 million. Over the past week, 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 1.79% lower than its 52-week high, the overall market sentiment appears positive. I like Norwood Financial's operating margin of 45.72%, a good sign for the company's financial health. The recent trading volume is below average. My thoughts: The company has a decent dividend payout that provides a minimum margin of safety. I would watch this stock with caution.

PROLOR Biotech, Inc. (NYSEMKT:PBTH) is a healthcare company, specifically in the industry of biotechnology. It has a market cap of $260.46 million. Over the past week, PROLOR Biotech has one insider who purchased a total of 5,000 shares at the total value of $24,045. The conclusion: There aren't enough positive factors to buy this company based on insider purchase alone.

Psychemedics Corp. (NASDAQ:PMD) is a healthcare company, specifically in the industry of medical laboratories & research. It has a market cap of $52.67 million. Over the past week, Psychemedics has one insider who purchased a total of 2,500 shares at the total value of $24,500. Given that its price is only 4.48% lower than its 52-week high, the overall market sentiment appears positive. I like Psychemedics' operating margin of 23.37%, a good sign for the company's financial health. The trading volume has been consolidating recently. The final words: The company has a decent dividend payout that provides a minimum margin of safety. It doesn't appear to be at a point of entry yet. Watch.

Pope Resources LP (NASDAQ:POPE) is an industrial goods company, specifically in the industry of lumber, wood production. It has a market cap of $260.13 million. Over the past week, Pope Resources LP has one insider who purchased a total of 1,909 shares at the total value of $104,758. Given that its price is only 2.30% lower than its 52-week high, the overall market sentiment appears positive. To conclude: The company has a decent dividend payout that provides a minimum margin of safety. There isn't enough financial evidence to back up a bullish case for this company.

Providence Service Corp. (NASDAQ:PRSC) is a healthcare company, specifically in the industry of specialized health services. It has a market cap of $179.11 million. Over the past week, Providence Service has one insider who purchased a total of 3,400 shares at the total value of $45,764. Given that its price is only 13.80% lower than its 52-week high, the overall market sentiment appears positive. My thoughts: I see more negatives than positives in this company.

Pacific Sunwear of California Inc. (NASDAQ:PSUN) is a services company, specifically in the industry of apparel stores. It has a market cap of $102.22 million. Over the past week, Pacific Sunwear of California has one insider who purchased a total of 25,000 shares at the total value of $39,750. The company is currently losing money operationally. Its business has to turnaround for the situation to become more positive. In conclusion: There isn't enough financial evidence to back up a bullish case for this company.

Rimage Corporation (RIMG) is a technology company, specifically in the industry of data storage devices. It has a market cap of $78.95 million. Over the past week, Rimage has one insider who purchased a total of 2,925 shares at the total value of $24,058. Its price is only around 4.85% 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. To conclude: The company has a decent dividend payout that provides a minimum margin of safety. This company appears a risky play.

School Specialty Inc. (NASDAQ:SCHS) is a services company, specifically in the industry of education & training services. It has a market cap of $55.13 million. Over the past week, School Specialty has 2 insiders who purchased a total of 72,100 shares at the total value of $207,884. Multiple insider purchase occasions are usually a positive sign. In conclusion: This company appears a risky play.

Surrey Bancorp (OTCQB:SRYB) is a financial company, specifically in the industry of regional - mid-Atlantic banks. It has a market cap of $32.72 million. Over the past week, Surrey Bancorp has one insider who purchased a total of 5,016 shares at the total value of $42,636. Given that its price is only 9.46% lower than its 52-week high, the overall market sentiment appears positive. I like Surrey Bancorp's operating margin of 39.34%, a good sign for the company's financial health. The trading volume has been consolidating recently. To summarize: The company has a decent dividend payout that provides a minimum margin of safety. This stock is OK for your watch list, but not particularly appealing based on its overall financial records.

Samson Oil & Gas Limited (NYSEMKT:SSN) is a basic materials company, specifically in the industry of oil & gas drilling & exploration. It has a market cap of $107.45 million. Over the past week, Samson Oil & Gas Limited has 2 insiders who purchased a total of 1,004,000 shares at the total value of $68,000. Multiple insider purchase occasions are usually a positive sign. Its price is near the bottom, at around 5.22% off its 52-week low. The company is currently losing money operationally. Its business has to turnaround for the situation to become more positive. The conclusion: I don't think the company's overall financial record to be very solid.

Synergetics USA, Inc. (NASDAQ:SURG) is a healthcare company, specifically in the industry of medical appliances & equipment. It has a market cap of $96.75 million. Over the past week, Synergetics USA has 2 insiders who purchased a total of 6,800 shares at the total value of $27,325. Multiple insider purchase occasions are usually a positive sign. Its price is near the bottom, at around 18.79% off its 52-week low. The conclusion: There isn't enough financial evidence to back up a bullish case for this company.

Synergy Resources Corporation (NYSEMKT:SYRG) is a basic materials company, specifically in the industry of oil & gas equipment & services. It has a market cap of $136.05 million. Over the past week, Synergy Resources has one insider who purchased a total of 20,000 shares at the total value of $56,740. Its price is only around 19.09% off its 52-week low. While the stock appears it might have bottomed. Investors should proceed with caution. I like Synergy Resources' operating margin of 38.42%, a good sign for the company's financial health. To summarize: I see more negatives than positives in this company.

Universal Stainless & Alloy Products Inc. (NASDAQ:USAP) is a basic materials company, specifically in the industry of steel & iron. It has a market cap of $258.35 million. Over the past week, Universal Stainless & Alloy Products has one insider who purchased a total of 9,885 shares at the total value of $396,685. The conclusion: This is likely a stock very low on my watch list.

ValueVision Media Inc. (NASDAQ:VVTV) is a services company, specifically in the industry of catalog & mail order houses. It has a market cap of $98.59 million. Over the past week, ValueVision Media has 2 insiders who purchased a total of 14,000 shares at the total value of $25,100. Multiple insider purchase occasions are usually a positive sign. One concern is the company isn't profitable at this point. The verdict: I don't think the company's overall financial record to be very solid.

ZELTIQ Aesthetics, Inc. (NASDAQ:ZLTQ) is a healthcare company, specifically in the industry of medical appliances & equipment. It has a market cap of $198.01 million. Over the past week, ZELTIQ Aesthetics has 2 insiders who purchased a total of 75,454 shares at the total value of $361,800. Multiple insider purchase occasions are usually a positive sign. The company is currently losing money operationally. Its business has to turnaround for the situation to become more positive. To conclude: There aren't enough positive factors to buy this company based on insider purchase alone.

Source: Notable Micro Cap Insider Buys This Week