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Insiders and analyst are on the same page. Institutional investors aren't being left out either: It's therefore agreed by (almost) all: These stocks are hot.

The three firms listed below meet all of the following criteria:

  • Net institutional buying of shares in the current quarter: Hedge fund managers, who have access to sophisticated market analysis, believes these names have significant upside to price in
  • Company insiders, like upper management and board members, have used their personal funds to buy blocks of shares in their own firms. Because insiders know their companies better than anyone else, this is considered very bullish. We search for significant net purchases in the past six months.
  • "Buy" or "Overweight" ratings from top analysts. We screened for these ratings from reputable firms: Argus, Barclays, Canaccord Genuity, Collins Stewart, Deutsche, Needham, Oppenheimer, Robert W Baird, UBS, and Wedbush. Although they're not always correct, analysts put a lot of time and analysis into their ratings so we can assume they have good reason for these bullish ratings.

As you can see, analysts on average agree. For an interactive version of this chart, click on the image below. Analyst ratings sourced from Zacks Investment Research.

Tool provided by Kapitall (www.kapitall.com). More investing ideas on Kapitall Wire (wire.kapitall.com).

So what do you think of this bullishness? Use this list as a starting point for your own analysis.

  1. Heritage-Crystal Clean, Inc (NASDAQ:HCCI): Provides industrial and hazardous waste services to small and mid-sized customers in the United States. Market cap at $350.72M, most recent closing price at $19.36. Net institutional purchases in the current quarter at 2.8M shares, which represents about 31.32% of the company's float of 8.94M shares. Over the last six months, insiders were net buyers of 152,423 shares, which represents about 1.7% of the company's 8.94M share float. On 02/24/2012, Needham had a Buy rating on the stock.
  2. PROLOR Biotech, Inc. (NYSEMKT:PBTH): Engages in the development of proprietary versions of already-approved therapeutic proteins. Market cap at $307.54M, most recent closing price at $4.81. Net institutional purchases in the current quarter at 4.8M shares, which represents about 13.39% of the company's float of 35.86M shares. Over the last six months, insiders were net buyers of 1,000,000 shares, which represents about 2.79% of the company's 35.86M share float. On 08/29/2012, Oppenheimer had a Outperform rating on the stock.
  3. Pacira Pharmaceuticals Inc. (NASDAQ:PCRX): Engages in the development, commercialization, and manufacture of pharmaceutical products for hospitals and ambulatory surgery centers. Market cap at $585.51M, most recent closing price at $18.23. Net institutional purchases in the current quarter at 7.5M shares, which represents about 36.21% of the company's float of 20.71M shares. Over the last six months, insiders were net buyers of 511,422 shares, which represents about 2.47% of the company's 20.71M share float. On 12/09/2011, Barclays Capital had a Overweight rating on the stock.

*Insider data sourced from Yahoo!Finance, institutional data sourced from Fidelity, ratings from Reuters, all other data sourced from Finviz.

Source: 3 Small Cap 'Buy' Rated Stocks With Institutional And Insider Buying