This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

3 Small-Cap Stocks on Insiders' Radar

Stocks in this article: BPAXMDCADSCI

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

By Dave Sterman

NEW YORK ( StreetAuthority) -- A regular scan of Securities and Exchange Commission filings by corporate insiders can point the way to great investment opportunities.

These officers and directors use their own funds to snap up their company's stock on the open market. You'll often find recognizable names, underscoring bullish opinions you may already have. For example, insiders have recently acquired shares at firms such as Chesapeake Energy (CHK), Ford Motor (F), Whirlpool (WHR) and Family Dollar Stores (FDO).

Yet you'll also come across companies you've never heard of, the ones that toil in anonymity until they appear on various stock screens. With this in mind, I've taken a look at several small stocks that recently saw significant insider buying and found three companies that appear to have especially strong appeal. (Special thanks to insiderinsights.com, which provides me with the insider information used in this and other insider-focused stories.)

Here they are...

1. Biosante Pharmaceuticals (BPAX)

Market cap.: $273 million

Three Insiders first started acquiring a collective 17,000 shares of this testosterone drug-developer back in January when shares traded under $2. Investors grew increasingly excited about the company's prospects, as several drugs moved closer to getting final Food and Drug Administration approval.

Shares moved up toward the $4 mark this summer, but the sharp market drop crushed virtually every biotech stock, including Biosante. Biotech companies tend to elicit nervousness from investors, because these firms may find it harder to raise more money for their research and development efforts during a market slowdown.

Undeterred, Biosante's insiders again bought a collective 117,000 shares in August at an average price of about $2.30. Just this week (Nov. 14), another insider made a modest additional purchase of 3,000 shares.

Why are these insiders so enthused? Because the company's LibiGel, which among other uses, treats female sexual dysfunction, could be approved as soon as early 2012. Biosante is also partnering with Teva Pharmaceuticals (TEVA) to secure FDA approval of a testosterone gel for the treatment of male patients with Hypogonadism, a hormone dysfunction in the sex glands. Teva, which is responsible for all regulatory and marketing activities for the drug, will go before the FDA in the middle of February. It won't be long before we see whether this bullish insider activity pays off.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,856.72 +28.97 0.16%
S&P 500 2,069.80 -3.03 -0.15%
NASDAQ 4,800.3620 +13.0450 0.27%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs