We recently published a list of 10 Small–Cap Stocks Insiders Are Buying Recently. In this article, we are going to take a look at where Granite Ridge Resources, Inc. (NYSE:GRNT) stands against other small–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 drilling rig pumping away in the Bakken Formation in the backdrop of a Texas prairie.
Granite Ridge Resources, Inc. (NYSE:GRNT)
Number of Insiders Buying: 6
Market Capitalization: $799.5 million
In November and December, six insiders, including President and CEO, CFO, and directors, acquired about $741,000 worth of Granite Ridge Resources, Inc. (NYSE:GRNT) shares at an average price of $6.35 per share. The stock is currently trading at $6.20 per share, having declined 4.02% year-to-date.
The average rating for GRNT stock from three analysts is “Buy,” with a 12-month stock price target of $7.6, according to data from StockAnalysis. One Wall Street analyst forecasts a higher price of $8.80.
Granite Ridge Resources (NYSE:GRNT) has a diverse portfolio of wells and top-tier acreage across the Permian basin and four other prolific unconventional basins across the United States. This is a hybrid oil and gas company and private equity firm, touting the benefits of both organization types. A non-operated oil and gas company means that it does not drill or operate its own wells. Instead, it focuses on increasing asset diversity to reduce risk.
Over the last 12 months, its shares gained 16.32%.
In its latest financial report for the third quarter of 2024, the company reported consolidated oil and gas sales of $94.08 million, compared to $108.40 million in the comparable quarter of 2023. This is a dividend-paying stock, and in the third quarter it declared a regular quarterly dividend of $0.11 per share.
Overall, GRNT ranks 8th on our list of small–cap stocks insiders are buying recently. While we acknowledge the potential of GRNT, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than GRNT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article is originally published at Insider Monkey.
