5 Cheap Stocks with Insider Buying

03/22/2011 7:00 am EST

Focus: STOCKS

Active buying by company insiders has put these five small-cap names on the radar. Each one comes with high volatility and a price tag below $4.  

By the Staff at Kapitall.com

If you're looking for small-cap ideas, the following list might be interesting to you.

This is a list of stocks with market cap above $100 million that are all trading below the $4 price mark.

Additionally, all of these companies have seen significant insider buying over the last six months as company insiders seem to think they offer good value at current levels.

(The list has been sorted by the change in insider ownership over the last six months.)

Mad Catz Interactive Inc. (MCZ): Toys and games industry

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MCZ has a market cap of $100.85 million and is trading under $2.00. Over the last six months, shares held by insiders increased by 486,300, a 52.5% change in insider ownership. Earlier in the year, MCZ was chosen by Microsoft (MSFT) to develop a co-branded wireless headset for the Xbox 360.

Inuvo, Inc. (INUV): Marketing services industry

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INUV has a market cap of $254.79 million and is trading just over $3.00. Over the last six months, shares held by insiders increased by 670,541, a 51.2% change in insider ownership. Bridge Bank recently opened an $8 million credit line for the company. At a time when credit remains tight, it’s a positive sign.

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Banner Corporation (BANR): Savings and loans industry

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Banner Corp. has a market cap of $264.46 million and is trading around $2.45. Over the last six months, shares held by insiders increased by 759,574, a 22.9% change in insider ownership. The stock recently made a list of “short interest percentage decreases,” indicating the short sellers have been squeezed out.

Hansen Medical, Inc. (HNSN): Medical appliances and equipment industry

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HNSN has a market cap of $113.50 million and is trading just under $2.00. Over the last six months, shares held by insiders increased by 1,010,000, a 16.2% change in insider ownership. Analysts covering this stock are divided, with about half posting a buy recommendation and the other half posting sell or hold recommendations.

Star Scientific, Inc. (CIGX): Cigarettes industry

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Star Scientific has a market cap of $283.21 million and is trading around $3.70 at the time of this writing. Over the last six months, shares held by insiders increased by 4,125,930, an 11.2% change in insider ownership.

This stock has seen tremendous volatility over the last two weeks and may be a potential shorting opportunity. Reactions that large in lower-priced stocks can often be overreactions to news events.

The stock reacted positively to a ruling by the US patent office that stated its patents for reducing carcinogens in cigarettes are valid. However, lawsuits from much larger competitors such as Reynolds American (RAI) may still weigh on the stock.

By the Staff at Kapitall.com

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