In this article, we will take a detailed look at 10 Small–Cap Stocks Insiders Are Buying Recently. We previously covered 10 Large-Cap Stocks Insiders Are Buying Recently.
Why should we be interested in stocks with smaller market capitalizations? Small-cap stocks usually operate in other industries than large-cap companies, meaning they will help investors diversify their portfolios. Also, the share price of small-cap stocks is often lower, which makes them more affordable. Some small-cap investors focus on finding young companies with strong growth potential, which can lead to high returns once they transition to large-cap stocks. While small-cap stocks often carry higher risks and are more prone to market volatility, they also offer investors more room for growth.
How to pick good small-cap stocks to invest in currently? While there’s no single simple or complicated rule that investors can follow to achieve secure results, there are some strategies that can help. One strategy is to keep track of insider trading activity. Insiders or, in other words, people at high positions within companies, such as CEOs, CFOs, directors and other executives have unparalleled insights into the company’s strategic moves, plans, and initiatives. A CEO’s investment in a company’s stock can sometimes signal strong confidence in the company’s future.
Insider trading activity should be assessed within the broader context of the company’s fundamentals, industry trends and overall market conditions, because behind insider moves can be various other motives. Heavy insider trading activity doesn’t necessarily mean the company is poised for growth. That’s why due diligence is of utmost importance before making any investment. Investors should also take into account and meticulously analyze underlying reasons for insider transactions. However, insider trading activity in combination with other relevant factors can offer valuable insights into a company’s capabilities, helping investors make more informed investment decisions.
To come up with the 10 small-cap stocks insiders are buying recently, we only considered stocks with a market capitalization of between $250 million to $2 billion. We first used Insider Monkey’s insider trading screener and searched for stocks with at least two insiders buying shares in the last three months.
With each stock we note the number of recent insider purchases and the company’s current market capitalization. But why is it important to follow insider activity? Our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds, focusing on insider trading and stock picks from hedge fund investor newsletters and conferences. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A close up of a trader on a trading floor busily pushing buttons.
10. CION Investment Corporation (NYSE:CION)
Number of Insiders Buying: 5
Market Capitalization: $624.511 million
CION Investment Corp. is a business development company that primarily provides senior secured loans to U.S. middle-market companies. In November, five insiders, including the President and CEO, co-CEO, and CCO bought approximately $52,700 worth of CION Investment Corporation shares at a price of around $11.42 per share. The stock is currently trading at $11.56 having gone up 1.40% year-to-date.
On November 13, the company announced that its CION Grosvenor Infrastructure Fund has been declared effective by the Securities and Exchange Commission. This positive development might have been the reason behind insider stock purchases in November.
In December, the company declared a special distribution of $0.05 per share for the year ending December 31, 2024. In January the company announced the launch of the CION Grosvenor Infrastructure Fund with $240 million invested in infrastructure assets.
According to data from StockAnalysis, two analyst’s average rating on CION stock is “Hold,” and the 12-month price target is $12.25, representing an increase of 5.97% from the latest price.
9. Wolfspeed, Inc. (NYSE:WOLF)
Number of Insiders Buying: 5
Market Capitalization: $924.87 million
A manufacturer of silicon carbide (SiC) materials and devices, integral to the advancement of electric vehicles (EVs), renewable energy systems, and 5G telecommunications, Wolfspeed is one of 10 small-cap stocks insiders are buying recently. In November, as many as five insiders bought around $846,870 worth of Wolfspeed shares at a price of around $6.78 per share. The stock is currently trading at $5.92 per share, meaning it is even more affordable now than when insiders were buying.
According to data from StockAnalysis, the average rating for WOLF stock from 16 analysts is “Hold.” The 12-month stock price forecast is $14.86, signaling a solid upside.
For the second quarter of fiscal 2025, Wolfspeed reported net revenue of $181 million, compared to $208 million in the same period of fiscal 2024. The company is focused on expanding its manufacturing capabilities and enhancing operational efficiency.
Over the last five years, Wolfspeed shares lost 87.78%. However, recent insider purchases show the management’s confidence in the company’s strategic plan.
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