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As we head into the holiday break, things are getting quiet. Trading is slowing down, and most people are focused on gift shopping. But while the rest of the world is distracted, we noticed a few CEO’s doing some shopping of their own, for their own stock.
For small-cap investors, this is the most confusing time of year. You look at a stock that is down and wonder: Is this a bargain, or is the company in trouble?
To answer that, we look at people running the companies. We want to know, is the CEO trying to put on a brave face, or are they writing a check because they know the market is wrong.
The data shows two trends this week:
1. Biotech executives are quietly buying shares before big announcements.
2. Big money is moving out of “hype” stocks and into “real world” things like roads and bridges.
Here is where the money is going.
Follow The Money 💰
We flag insider buying signals to alert you to opportunities.
Relmada Therapeutics (RLMD)
Biotech is a speculative sector, you are betting on science that hasn't happened yet. Usually, executives passively accumulate shares through options. They rarely write checks.
That is why Relmada Therapeutics triggered a “high conviction” signal this week. On Dec. 15, CEO Sergio Traversa purchased 27,500 shares on the open market, investing roughly $113,000 of his own capital.
Why it matters: Relmada is approaching a critical data readout. When a CEO buys into a dip right before a blackout period, it is the strongest possible signal that he expects the upcoming clinical results to validate the company's valuation. The model views this as high-conviction positioning, though we advise caution as the fundamental Quality scores remain low.
Scorecard
Our proprietary quantitative Scorecard rating (1-5), helping you find stocks for your watchlist.
The "Streamflation" Winner: Magnite Inc. (MGNI) Score: 4.1 | Buy
The era of cheap, ad-free streaming is effectively over. As consumers migrate to ad-supported plans to combat rising subscription costs, the streaming wars have entered a new phase.
Why it matters: Magnite acts as the toll booth for those ads. Unlike most small caps, it is highly profitable with a ~$480M cash pile. One analyst's street-high $39 price target implies the stock could more than double. A breakout above $16.50 would confirm the momentum.
The Climate Defense Winner: Great Lakes Dredge & Dock (GLDD) Score: 4.0 | Buy
Great Lakes Dredge & Dock, the largest provider of dredging services in the U.S., just confirmed that 2025 is on track to be the "highest EBITDA year in company history," driven by high-margin coastal protection projects.
Why it matters: As climate change accelerates coastal erosion and ports race to expand for larger ships, GLDD is the primary beneficiary of the "Infrastructure Renaissance." Unlike speculative green energy stocks, GLDD is a profitable industrial workhorse with a massive ~$1.13 billion project backlog (including pending awards).
The Wildcard: Recursion Pharmaceuticals (RXRX) Score: 2.9 | Speculative Buy
While the first wave of the AI boom was about chips and chatbots, the next wave is about biology.
Why it matters: Recursion uses Nvidia-backed supercomputing to model drug interactions, attempting to turn biology into an engineering problem. JPMorgan just upgraded the stock to "Overweight" with an $11 price target following positive Phase 2 data for their lead genetic disease treatment. The stock is high-risk/high-reward, but today’s double-digit move suggests the "Smart Money" is positioning for a rotation from chips to healthcare AI.
Quick Hits ⚡
Headlines moving the small-cap world this week.
The Wildcard: ContextLogic (LOGC) announced a "bizarre" pivot this week, using its cash pile to acquire US Salt for $907 million. This move transforms the company from "failed tech" into an essential commodity play, swapping e-commerce uncertainty for high-margin, recession-proof cash flow.
The Winner: Innoviva (INVA) secured a massive regulatory victory on Friday with FDA approval for zoliflodacin, its new oral antibiotic for drug-resistant gonorrhea. With "superbugs" posing a global crisis and effective treatments scarce, this approval eliminates regulatory risk and shifts the narrative purely to sales execution.
The Acquisition: Worthington Steel (WS) surged ~20% on Wednesday after reporting fiscal Q2 earnings. Sales jumped 19% to $327M, but the real catalyst was the announced $205M acquisition of LSI Group. Management also aggressively bought back 250,000 shares, signaling they believe the stock is undervalued
The Survival: B. Riley Financial (RILY) staged a massive ~28% rally this week after successfully filing its delayed Q2 financials just days before the Nasdaq delisting deadline. The filing removed the immediate "death threat" hanging over the stock, forcing shorts to cover as the company fights to regain compliance.
The Plunge: The Children's Place (PLCE) crashed over 30% after missing Q3 revenue estimates and posting a net loss. Despite closing a new $450M refinancing deal to improve liquidity, the retailer is struggling with tariff pressures and a difficult e-commerce transition.
The Dip: CSP Inc. (CSPI) fell ~15% in after-hours trading Wednesday despite reporting 11% revenue growth. The market punished the stock for its valuation, even as its high-margin service revenue grew to 44% of the total mix.
The Beat: Optex Systems (OPXS) reported impressive full-year growth on Dec. 17, with operating income up nearly 48%. However, the stock pulled back ~11% as investors "sold the news" on slight backlog weakness, potentially offering a better entry point for long-term holders.
The Red Flag Radar 🚩
Hidden risks in the fine print. These are your sell signals.
Auditor Resignations: Alt5 Sigma (ALTS) We urge extreme caution. Recent filings show a management shakeup coincided with the resignation of the company's auditor, Hudgens CPA. When the people paid to verify the math quit, the stock becomes a "black box."
The Year-End Exit: Treasure Global (TGL) On Dec. 15, the CFO resigned. When a financial chief leaves two weeks before the annual books are closed, it frequently signals that the numbers aren't adding up. We recommend staying on the sidelines.
