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Generally speaking, small cap (market cap < $2 billion) companies are not closely followed by analysts, journalists, or bloggers, which makes choosing the right small-cap like finding a needle in a haystack. However, insider 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.

China Information Security Technology Inc (NASDAQ:CNIT) is an application software company. It has a market cap of $27.50 million. According to today's SEC filing, China Information Security Technology has one insider who purchased a total of 15,450 shares at the total value of $15,450. Its price/book ratio is 0.12. The company is selling below book value, something worth further investigation. It has an enterprise value/EBITDA ratio of 5.17. Since EV/EBITDA ratio already considers the debt burden, the valuation is quite cheap. One concern is that the company is not profitable at this point. The company had a net income of -$3.17 million and EBITDA of $10.53 million on revenue of $103.87 million. The company has $7.60 million cash on its balance sheet. Its debt burden is $35.10 million. So liquidity is not yet a concern. Low recent trading volume can be negative or positive. I don't think the company's overall financial record is very solid.

Marchex, Inc. (NASDAQ:MCHX) is a marketing services company. It has a market cap of $126.00 million. The company pays a dividend of 2.30%. According to today's SEC filing, Marchex has one insider who purchased a total of 5,000 shares at the total value of $18,300. The PEG ratio is slightly above 1, not much a concern of valuation. Its price/book ratio is 0.73. Such a low price/book ratio often suggests the market is discounting the asset value of the company, making it potentially undervalued. Marchex has an enterprise value / EBITDA ratio of 10.07. This is a reasonable valuation. The company is currently losing money operationally. Its business has to turnaround for the situation to become more positive. The company had a net income of $1.40 million and EBITDA of $7.64 million on revenue of $153.13 million. The company has $41.29 million cash on its balance sheet and no debt. This month, 2.56 million shares are being shorted. The short ratio of Marchex is 19.00, accounting for 11.30% of floating shares.

Sonic Corp. (NASDAQ:SONC) is a restaurants company. It has a market cap of $619.10 million. According to today's SEC filing, Sonic has one insider who purchased a total of 5,000 shares at the total value of $51,250. I've written about Sonic before in this Seeking Alpha article. Its stock price is 8.91% below the 52-week high, a plus on the technical side. Its P/E ratio of 18.61 is on the expensive side. Investors should use some cautious because of this valuation. This company's PEG ratio is close to 1, not yet a strong sign of overvaluation. Sonic has an enterprise value / EBITDA ratio of 8.19. It has a profit margin of 6.23%. The company had a net income of $33.87 million and EBITDA of $129.07 million on revenue of $543.97 million. I would not buy the stock at this point.

S.Y. Bancorp, Inc. (NASDAQ:SYBT) is a Southeast banking company. It has a market cap of $339.10 million. The company pays a dividend of 3.20%. According to today's SEC filing, SY Bancorp has 2 insiders who purchased a total of 489 shares at the total value of $11,818. Multiple insider purchase occasions are usually a positive sign. Its price shows near term strength, close to 52-week high (only 0.16% lower). It has a reasonable P/E ratio of 13.70. It has a profit margin of 26.59%. I like S.Y. Bancorp's operating margin of 38.73%, a good sign for the company's financial health. Its revenue grew by 5.30%, and its net income improved by 18.40% during the most recent quarter. The recent trading volume is about average. This month, 0.71 million shares are being shorted. The short ratio of S.Y. Bancorp is 31.00, accounting for 5.50% of floating shares. I like what I see about this company.

Vistaprint Limited (VPRT) is a business services company. It has a market cap of $1.204 billion. According to today's SEC filing, Vistaprint has one insider who purchased a total of 10,000 shares at the total value of $325,120. Its P/E ratio of 24.39 is on the expensive side. Investors should use some caution because of this valuation. The sub-1 PEG ratio suggests it's somewhat undervalued. Vistaprint has an enterprise value / EBITDA ratio of 10.30. It has a profit margin of 5.57%. Vistaprint has a relatively low operating margin of 6.85%. The company had a net income of $54.54 million and EBITDA of $116.71 million on revenue of $978.65 million. Its revenue grew by 26.50%, and its net income declined by 98.80% during the most recent quarter. It operating cash flow is $157.61 million, and its free cash flow is $112.84 million. Vistaprint's shares are heavily shorted. This month, 8.80 million shares are being shorted. The short ratio of the company is 15.20, accounting for 30.20% of floating shares. Such a high short ratio means two things: 1) the market is bearish about the stock in general, and 2) short squeeze could easily happen with suitable news. I do not see enough evidence for establishing a position.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: Small Cap Insider Buys Today