A regular scan of Securities and Exchange Commission (SEC) 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 (NYSE: CHK), Ford Motor Co. (NYSE: F), Whirlpool (NYSE: WHR) and Family Dollar Stores (NYSE: 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…

#-ad_banner-#1. Biosante Pharmaceuticals (Nasdaq: 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 (FDA) 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 (Nasdaq: TEVA) to secure FDA approval 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.

2. MDC Partners (Nasdaq: MDCA)
Market cap.: $413 million
The global advertising industry is dominated by a few massive firms such as Omnicom (NYSE: OMC), Interpublic (NYSE: IPG), France-based Publicis (Pink Sheets: PUBGY) and U.K.-based WPP (Nasdaq: WPPGY). These firms accounted for a collective $30 billion in revenue last year.

Toiling in their shadow is Canada-based MDC Partners, which is growing at a very rapid pace, thanks to an emphasis on digital advertising. The company’s online campaigns, which augment traditional print and broadcast ad campaigns for clients, have helped create industry buzz — and poach rivals’ clients.

MDC’s sales have shot up from $400 million in 2006 to $700 million in 2010, and analysts say this figure may top $1 billion by 2012. Still, this stock remains fairly unloved. It hit almost $16 a share in 2004 and recently traded hands at about $14 per share. This may explain why insiders have been buying stock for nearly two years straight. They bought 51,000 shares in August (at an average price of $16), 5,000 shares in September (at about $14) and, earlier this month, four different insiders combined to buy 30,000 shares at an average price of roughly $14.50.

Where’s the stock headed? I figure this high-growth business model is worth at least eight times projected 2012 EBITDA of about $125 million, which would put the stock at $25 a share. That’s an incredible potential 80% gain.

3. Derma Sciences (Nasdaq: DSCI)
Market cap.: $86 million
This is an intriguing health care play, supported by more than $1 million of insider buying by a small group during the past two months. Derma Sciences generates roughly $60 million in annual sales by selling a range of wound-dressing products such as private-label bandages, gauze-based dressings and advanced wound-care products that have micro-nutrients to aid in healing.

Management is taking the bold step of adding a biotech twist to the business model. Derma’s DSC127 drug is a patented formulation that can accelerate healing and reduce scar formation. The product has already been through Phase II clinical testing, and after an upcoming meeting with the FDA, will proceed to Phase III trials in the spring. The potential market opportunity is well above the company’s $85 million market value. What’s the upside? It’s hard to quantify, but further clinical testing progress can only help put this stock onto more radars.

Risks to Consider: Insiders don’t always have great timing, so their purchases can sometimes take place well in advance of any actual share-price movement.

Action to Take –> Heavy insider buying underscores the fact that these stocks are under-appreciated, or at least not fully understood by most investors. They may be off most investors’ radars right now, but forward momentum for each of these business models could make them household names in 2012. Aggressive investors may want to take a small stake in any of these names after further due diligence.