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Why does insider purchase matters for small companies? Because small companies often have no analysts following them. 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 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.

DGT Holdings Corp. (OTCPK:DGTC) is a diversified electronics company. It has a market cap of $38.58 million. Its stock closed at $10.05 per share on Friday. Over the past week, DGT Holdings had one insider who purchased a total of 7,000 shares at the total value of $76,016. The current price is fairly close to its 52-week high. Its price/book ratio is 0.78. The company is selling below book value, something worth further investigation. DGT Holdings Corp. has a very low operating margin of 4.99%. The company had a net income of $1.74 million and EBITDA of $4.26 million on revenue of $69.03 million. Trading is fairly active with this company lately, reflected in elevated volume. It doesn't appear to be at a point of entry yet. Watch.

Kewaunee Scientific Corp. (NASDAQ:KEQU) is a scientific & technical instruments company. It has a market cap of $31.09 million. Its stock closed at $12.06 per share on Friday. Over the past week, Kewaunee Scientific had one insider who purchased a total of 2,000 shares at the total value of $22,700. Its price shows near term strength, close its to 52-week high (only 6.37% lower). Its price/book ratio is 1.06. Kewaunee Scientific has an enterprise value / EBITDA ratio of 5.97. Since EV/EBITDA ratio already considers the debt burden, the valuation is quite cheap. Its profit margin was 1.00% over the past year. I don't like Kewaunee Scientific's operating margin of 2.64%, a sign for the company's shaky financial health. The company had a net income of $1.03 million and EBITDA of $5.37 million on revenue of $102.85 million. Its revenue grew by 7.60%, and its net income improved by 398.40% during the most recent quarter. Over the past ten days, Kewaunee Scientific has seen significantly higher than average trading volume. The trailing dividend yield is 3.30. Over the past five years, the average yield is 3.30. This stock is OK for your watch list, but not particularly appealing based on its overall financial records.

National Bancshares Corp. (OTCQB:NBOH) is a money center banks company. It has a market cap of $33.53 million. Its stock closed at $15.13 per share on Friday. Over the past week, National Bancshares had four insiders who purchased a total of 1,866 shares at the total value of $28,379. Multiple insider purchase occasions are usually a positive sign. Its price/book ratio is 0.78. Its profit margin was 17.79% over the past year. I like National Bancshares' operating margin of 22.85%, a good sign for the company's financial health. Its revenue grew by 5.50%, and its net income improved by 43.70% during the most recent quarter. The trading volume has been consolidating recently. The trailing dividend yield is 2.10.

Omega Protein Corp. (NYSE:OME) is a processed and packaged goods company. It has a market cap of $159.91 million. Its stock closed at $8.16 per share on Friday. Over the past week, Omega Protein had two insiders who purchased a total of 3,038 shares at the total value of $22,115. Multiple insider purchase occasions are usually a positive sign. Its price/book ratio is 0.81. Omega Protein has an enterprise value / EBITDA ratio of 3.65. The EV/EBITDA ratio indicates this company is cheap. Its profit margin was 13.74% over the past year. The company had a net income of $30.03 million and EBITDA of $39.69 million on revenue of $218.51 million. Both its revenue and earnings declined in double digits over the latest quarter, by 29.60% and 69.30%, respectively. This month, 0.70 million shares are being shorted. The short ratio of Omega Protein is 6.60, accounting for 4.10% of floating shares. I do not see enough evidence for establishing a position.

Strategic Diagnostics Inc. (OTC:SDIX) is a medical instruments and supplies company. It has a market cap of $28.11 million. Its stock closed at $1.36 per share on Friday. Over the past week, Strategic Diagnostics Inc. had one insider who purchased a total of 804,500 shares at the total value of $949,310. The shares sold account for 3.38% of the company's market cap. One concern is the company isn't profitable at this point. The company had a net income of $-4.92 million and EBITDA of $-3.68 million on revenue of $23.27 million. The company has $9.80 million cash on its balance sheet and its debt burden is $0.20 million. Trading is fairly active with this company lately, reflected in elevated volume. There isn't enough financial evidence to back up a bullish case for this company.

Versant Corp. (NASDAQ:VSNT) is an application software company. It has a market cap of $27.07 million. Its stock closed at $9.80 per share on Friday. Over the past week, Versant had one insider who purchased a total of 2,799 shares at the total value of $27,150. Its price/book ratio is 0.87. Versant has an enterprise value / EBITDA ratio of 2.87. The EV/EBITDA ratio indicates this company is cheap. Its profit margin was 4.27% over the past year. I believe Versant's operating margin of 6.84% is acceptable. The company had a net income of $0.69 million and EBITDA of $1.69 million on revenue of $16.37 million. Its operating cash flow is $1.77 million, and its free cash flow is $1.08 million. The recent trading volume is about average. This company appears interesting.

Source: Notable Micro Cap Insider Buys This Week