5 Small-Cap Stocks With Insider Buying

In this article, we discuss 5 small-cap stocks with insider buying. If you want to see more stocks in this selection, check out 12 Small-Cap Stocks With Insider Buying. 

5. Wolverine World Wide, Inc. (NYSE:WWW)

Number of Hedge Fund Holders: 21

Wolverine World Wide, Inc. (NYSE:WWW) is a Michigan-based company that designs, manufactures, markets, and distributes footwear, apparel, and accessories in the United States, Europe, the Middle East, Africa, the Asia Pacific, Canada, and Latin America. On February 24, 2023, a director at Wolverine World Wide, Inc. (NYSE:WWW) purchased 10,000 shares of the company priced at $16.13 each. As of March 10, the stock trades at $16.14, indicating a return of 0.06% since the director purchased the company shares.

On February 8, Wolverine World Wide, Inc. (NYSE:WWW) declared a $0.10 per share quarterly dividend, in line with previous. The dividend is distributable on May 1, to shareholders of record on April 3.

According to Insider Monkey’s Q4 data, 21 hedge funds were long Wolverine World Wide, Inc. (NYSE:WWW), compared to 18 funds in the preceding quarter. Diamond Hill Capital is the largest stakeholder of the company.

Diamond Hill Capital made the following comment about Wolverine World Wide, Inc. (NYSE:WWW) in its Q4 2022 investor letter:

“Footwear and apparel company Wolverine World Wide, Inc. (NYSE:WWW) underperformed as softer demand and elevated inventory levels have necessitated higher-than-expected promotional activity, weighing on near-term profitability. During the quarter, the company announced decisions to simplify its brand portfolio and reduce its workforce — initiatives aimed at generating cost savings. We remain attracted to WWW’s strong collection of brands and its fragmented customer base.”

4. RLJ Lodging Trust (NYSE:RLJ)

Number of Hedge Fund Holders: 20

RLJ Lodging Trust (NYSE:RLJ) is a real estate investment trust that owns premium-branded, high-margin, focused-service, and compact full-service hotels. On September 23, a director at RLJ Lodging Trust (NYSE:RLJ) purchased 5,000 shares of the company priced at $10.47 each. As of March 10, the stock trades at $10.73, indicating a return of 2.5% since the director purchased the company shares. It is one of the best small-cap stocks with insider transactions. On February 27, the company announced a 60% increase in quarterly dividend to $0.08 per common share and a portfolio comparable RevPAR of $127.25. 

On October 20, Truist analyst Gregory Miller reiterated a Buy recommendation on RLJ Lodging Trust (NYSE:RLJ) but lowered the firm’s price target on the shares to $15 from $17 as part of a broader research note on Lodging REITs.

According to Insider Monkey’s Q4 data, 20 hedge funds were long RLJ Lodging Trust (NYSE:RLJ), compared to 21 funds in the prior quarter. Dmitry Balyasny’s Balyasny Asset Management is the biggest stakeholder of the company, with 1.45 million shares worth $15.4 million. 

Here is what ClearBridge Small Cap Value Strategy has to say about RLJ Lodging Trust (NYSE:RLJ) in its Q3 2022 investor letter:

“The Strategy benefited from its positioning in less interest-rate-sensitive companies within the real estate sector, where the aggressive increase in rates and hawkish outlook made it the benchmark’s second worst performing sector of the quarter. RLJ Lodging Trust (NYSE:RLJ), which specializes in premium-branded, high-margin hotels, benefited from its ability to adjust pricing to account for higher costs. Although the company saw their stock price decline during the period, they outperformed the broader real estate sector.”

3. V2X, Inc. (NYSE:VVX)

Number of Hedge Fund Holders: 19

V2X, Inc. (NYSE:VVX) is a Virginia-based company that provides critical mission solutions and support services to defense customers in the United States and internationally. On November 15, an officer at V2X, Inc. (NYSE:VVX) acquired 500 shares of the company valued at $42.28 per share. As of March 10, the stock trades at $40.21, indicating a negative return of 4.8% since the officer purchased the company shares.

On January 25, RBC Capital analyst Ken Herbert initiated coverage of V2X, Inc. (NYSE:VVX) with an Outperform rating and a $55 price target. V2X is the result of the Vectrus-Vertex merger that took place in July 2022, and according to the analyst, investors don’t fully understand it yet. However, there are some concerns about contract timing and budget risks, which has made the firm conservative in its 2023 estimates, that are lower than the consensus. Nevertheless, RBC is optimistic about V2X’s future and believes that the stock will gain value as investors become more familiar with its expanded capabilities, potential for increased margins, and reduction in debt.

According to Insider Monkey’s fourth quarter database, 19 hedge funds were bullish on V2X, Inc. (NYSE:VVX), compared to 18 funds in the prior quarter. Portolan Capital Management is the biggest investor in the company.

2. ModivCare Inc. (NASDAQ:MODV)

Number of Hedge Fund Holders: 18

ModivCare Inc. (NASDAQ:MODV) is a technology-led healthcare services company that operates through Non-Emergency Medical Transportation (NEMT), Personal Care, Remote Patient Monitoring (RPM), and Corporate and Other segments. In the beginning of December 2022, a director at ModivCare Inc. (NASDAQ:MODV) purchased 90,743 shares of the company priced at $76 each. As of March 10, 2023 the shares trade at $85.72, indicating a return of 12.78% since the director purchased the company shares.

On February 24, Deutsche Bank analyst Pito Chickering raised the firm’s price target on ModivCare Inc. (NASDAQ:MODV) to $120 from $100 and maintained a Buy rating on the shares following the Q4 results. The analyst sees an attractive setup for the shares into 2024.

According to Insider Monkey’s Q4 data, 18 hedge funds were long ModivCare Inc. (NASDAQ:MODV), compared to 19 funds in the preceding quarter.

Here is what Summers Value Partners has to say about ModivCare Inc. (NASDAQ:MODV) in its Q4 2021 investor letter:

“The biggest detractor in the fourth quarter was Modivcare (MODV), which was pressured by tightness in the labor market and two ill-advised acquisitions. We began trimming our position in Modivcare in the fall and recently exited the position entirely. When we first underwrote our investment in Modivcare almost two years ago, the company had a dominant position in its core non-emergency medical transportation market and a completely un-levered balance sheet. The risk/reward changed dramatically after the company overpaid for several acquisitions in 2021, leaving the company with too much debt for our comfort level especially considering the headwinds now facing the business.”

1. DigitalBridge Group, Inc. (NYSE:DBRG)

Number of Hedge Fund Holders: 23

DigitalBridge Group, Inc. (NYSE:DBRG) is a company that focuses on investing in and managing various businesses within the digital ecosystem, such as cell towers, data centers, fiber, small cells, edge infrastructure, digital infrastructure, and real estate. The company, which was established in 2009, has headquarters located in Boca Raton, Florida. On September 20, 2022, officers and directors at DigitalBridge Group, Inc. (NYSE:DBRG) purchased about 32,000 shares of the company, priced at $15.22 each. As of March 10, the stock trades at $11.97, indicating a negative return of 21.3% since the insiders purchased the company shares.

On February 27, B. Riley analyst Daniel Day maintained a Buy recommendation on DigitalBridge Group, Inc. (NYSE:DBRG) but lowered the firm’s price target on the shares to $32 from $36 following the Q4 results. Despite DigitalBridge Group, Inc. (NYSE:DBRG)’s ongoing transition towards a simpler business model as a pure-play alternative asset manager that focuses on digital infrastructure, the quarterly results may still appear inconsistent, the analyst wrote in a research note. However, DigitalBridge has continued to demonstrate robust growth in fees, and the outlook for fundraising remains strong, as per the analyst.

According to Insider Monkey’s Q4 data, 23 hedge funds were long DigitalBridge Group, Inc. (NYSE:DBRG), compared to 22 funds in the prior quarter. Charles Akre’s Akre Capital Management is the largest stakeholder of the company, with approximately 5 million shares worth $54.60 million. 

Ave Maria made the following comment about DigitalBridge Group, Inc. (NYSE:DBRG) in its Q3 2022 investor letter:

“DigitalBridge Group, Inc. (NYSE:DBRG) is in the process of transforming from a real estate investment trust (REIT) into an alternative asset manager. Legally, the company changed from a REIT to a C-Corp. in mid-2022. The company is monetizing the operating assets that it holds on its balance sheet. Once monetized, the company will look more like a pure-play alternative asset manager, similar to its large competitor, The Blackstone Group. The company has undergone a substantial transformation thus far, which should meaningfully impact the reported financials next year.”

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