One of the best ways to spot smaller opportunities is by tracking small-cap stocks with insider buying. After all, if the company’s Chief Executive Officer, Chief Financial Officer, board member, or director is buying, it’s a good idea to start looking into why.
That’s because they’re typically privy to information on new products, competition and the firm’s operating environment. We have to consider that insiders who are buying their stock wouldn’t put up their own money unless they believed the move would be profitable. Of course, it’s not always wise to base your own buying decisions solely on the actions of insiders.
But it’s a good start if you’re looking for potentially hot opportunities.
Here are just a few of the top small-cap stocks with insider buying you may want to consider buying today.
Archer Aviation (ACHR)
With a market cap of $1.36 billion, Archer Aviation (NYSE:ACHR) is one of the top companies developing flying cars. Fueling upside, Stellantis (NYSE:STLA) just bought another 17.4 million shares for about $55 million on July 1. They were also big buyers of STLA throughout March. All of this tells us that Stellantis continues to see big promise ahead for the flying car stock.
Even better, Archer says it’s on track to complete its manufacturing facility in Georgia later this year, which should be able to support the production of 650 flying cars a year.
Also, according to the Stellantis press release, “Stellantis has been a strategic partner to Archer since 2020 through various collaboration initiatives, and as an investor since 2021. During this time, Archer has leveraged Stellantis’ deep manufacturing, supply chain, and design expertise in connection with Archer’s efforts to design, develop, and commercialize its eVTOL aircraft.”
Nerdy (NRDY)
With a market cap of $284 million, Nerdy (NYSE:NRDY) is a platform for live online learning with a mission to transform how people learn through technology. The Company’s purpose-built proprietary platform leverages technology, including AI, to connect learners of all ages to experts, delivering superior value on both sides of the network.
While its stock performance is nothing to write home about lately, insiders are buying recent weakness. CEO Charles Cohn purchased another 347,275 shares for about $652,877, between $1.83 and $1.95 per share. Helping, earnings haven’t been too shabby.
In its first quarter, the company posted revenue of $53.7 million, a 9% jump year over year from $49.2 million. Its net loss of $12 million was also a marked improvement over a year-earlier net loss of $32.2 million. Four cents beat its EPS loss of 7 cents.
Technically, after pulling back from about $2.04 to $1.62, it appears to have caught strong support. From $1.62, I’d like to see NRDY initially retest $2.60.
Redfin (RDFN)
With a market cap of $712 million, Redfin (NASDAQ:RDFN) provides residential real estate brokerage and mortgage origination services. Fueling interest in the $5.96 stock, CEO Glenn Kelman bought 30,500 shares in early March for about $195,594. While the stock did pull back since that insider buy, it’s still an interesting opportunity as it slowly pivots from $5.50 support.
Earnings have been strong here, too. First-quarter revenue of $225.5 million beat estimates of $217.6 million. Better, its second-quarter revenue guidance ranges from $285 million to $298 million, above estimates of $283.8 million. Helping analysts at Stephens recently upgraded the RDFN stock to overweight with a $9 price target.
Analysts at Susquehanna also noted, “While the uncertainty surrounding the housing market keeps us on the sidelines, we like the company’s opportunity to scale the core business in new markets and improving traction in higher-margin segments.”
On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
