Last week, several sizable insider purchases of large cap stocks received a good deal of press. Perhaps even more intriguing to individual investors who track insider transactions are buys in the small cap space that remained under the radar. Here are three small cap stocks that insiders like right now:
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Vital Signs
On March 3, a director at Stereotaxis (Nasdaq: STXS) bought more than $240,000 worth of common stock at prices ranging from $4.82 to $4.83 per share. This transaction occurred less than a week after the company reported a 16.5% increase in Q4 revenue, as the medical device maker benefited from hospitals beginning to spend more on capital improvements.
For investors unfamiliar with Stereotaxis, the company makes devices that help physicians navigate catheters used in treating heart conditions. Similar companies that also manufacture devices used to help automate medical procedures include Hansen Medical (Nasdaq: HNSN) and Intuitive Surgical (Nasdaq: ISRG). All three of these companies stand to benefit from improved hospital spending trends.
Full Lockdown
Last week, a director for Cornell Companies (NYSE: CRN) picked up more than $190,000 worth of CRN shares at an average price of $19.38. The company provides correctional and treatment services to local, state and federal prisons. Cornell's stock price is down 10% year-to-date.
In Q4, the company activated an additional facility and benefited from increased populations at a couple of its existing facilities. Other prison stocks that investors might want to consider are Corrections Corp. of America (NYSE: CXW) and Geo Group (NYSE: GEO). The space experienced a recent pullback as investors became concerned over the possibility of future cuts in federal prison business.
Petro Play
In recent days, William Rucks, a director at PetroQuest Energy (NYSE: PQ), bought more than $330,000 worth of the company's stock at prices ranging from $5.49 to $6.03 per share. PetroQuest is an independent oil and gas company based in Louisiana.
This stock has rallied 240% over the past year. PetroQuest has an improving balance sheet, but it's coming off a Q4 in which its production was down 20% compared to the year-ago quarter. The company has an adequate cash position and should be able to weather temporary lulls in the commodity markets.
The Bottom Line
Company insiders can always assure shareholders that better times are ahead, but actions speak louder than words. Insider buying activity can serve as a great screening tool for individual investors seeking out new opportunities. These small cap stocks may not have received the same amount of press as their large cap counterparts, but they may contain greater upside potential. (To learn more, check out Delving Into Insider Investments.)
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