Top 20 Small Caps In Our Radar




































































StockMarket CapPriceYieldProfileProsCons
Santarus (SNTS) 134M 2.62 None Acid reflex pill (Zegerid) manufacturer. Stock down significantly from its 52-week high of 8.52. The product is a combination of Proton Pump Inhibitor (PPI) and antacids The pill is highly effective. Uncertainty clouds over revenue projections.
Stillwater Mining Company (SWC) 963M 10.44 None Palladium and Platinum producer – Platinum Group Metals (PGM). Palladium has the ability to absorb 500 times its volume of hydrogen and that characteristic is sought after for industrial use. Palladium prices peaked in 2001 and chances are high for an encore. Alternative metals could replace Palladium for industrial use thereby limiting its flight. The following article covers a bearish scenario: “Peak Palladium, Perhaps”.
Quality Systems (QSII) 840M 30.73 3.25 Software provider in the Electronic Medical Records (EMR) field. All Scripts (MDRX) is an alternative investment option in this space with web-based and client-server solutions. Its NextGen product is a popular client-server product in the field that addresses the high-end of the medical practices space. Timing of the web versions of their product line is unclear and is a risk.
U.S. Global Investors (GROW) 297M 18.82 1.28 Manages Mutual Funds focused on emerging markets and commodities. Returned 32 times in the last five years but the final two have been less stellar. Even after such returns, it trades at reasonable valuation. Any downturn in the bull cycle currently in emerging markets and commodities could result in further downward pressure on the share price.
Comtech Group (COGO) 673M 17.55None Customized module design solutions (LCD, camera, bluetooth, etc. components) for manufacturers in China. 30% grower trading for roughly that PE. The business is low margin.
American Oriental Bioengineering (AOB) 870M11.60 None Plant Based Pharmaceutical (PBP) & Plant Based Nutraceutical (PBN) products manufacturer based in China. The valuation is reasonable and any pullback in Chinese companies may provide a compelling entry point. Traditional Chinese Medicine (TCM) is a growth area. Chinese shares may be vulnerable to a pullback in the short-term as the bull market has had an extended run.
Avatar Holdings (AVTR) 333M 40.25 None Florida and Arizona housing developer. Holding up better in the wake of the housing downturn compared to other homebuilders as it benefits somewhat from being a full service provider whereby the other services bring in revenue. They also have 17000 acres of developable land that holds up the book value. It is not immune to an extended housing downturn.
Standard Pacific (SPF) 242M 3.33 None Worst performer of the homebuilders as a result of the housing wores. A rebound of the housing market can make this a good investment. Bankruptcy is a real possibility.
EnerNOC Inc. (ENOC) 844M 45.36 None Energy Management Services Company. Its systems help reduce energy usage by automatically turning off non-essential drainers of power when peak power demands occur. The business has high potential as utilities find the technology to be very cost-effective as they are charged 10 or more times normal rates for power at peak times. Valuation & growth expectation are both very high and so any disappointment on either front could slam the share price.
iRobot Corp (IRBT) 406M 16.61 None Manufacturer of the Roomba and other robots. 3rd quarter loss along with a loss of a large government contract has brought the price down 35%. Good holiday sales along with litigation outcomes could cause a reversal in the company’s prospects in the short-term. Long-term potential to dominate market because of patented technology. Adoption rates should pick up as the products becomes mainstream. Returns of earlier model robots are very high and the strategy of selling remanufactured products is questionable although it will help clear such inventory.
Uranerz Energy (URZ) 116M 2.98 None Exploration of Uranium properties in Wyoming, Sasketchewan, Canada and Mongolia. Slated to start production in the 2010 timeframe. Spot pricing has varied between $70 and $135 in the last few months. Now at around $90 Low valuation, high potential growth Production is still 2 years away and pricing of the end-product is very volatile.
SulphCo (SUF) 336M 4.26 None Development stage company engaged in Sonocracking (using high frequency sound waves to reduce the viscosity and other properties of crude oil increasing the amount of lighter oils that can be recovered during the refining process) Huge potential growth. Development Stage Company with associated risks.
Ionatron (IOTN) 254M 3.20 None Laser Guided Energy (LGE) and Counter Improvised Explosive Device (IED) products for the military. Non-lethal Laser Induced Plasma Channel (LIPC) is its core expertise. The best-case scenario is if it replaces guns as the weapon of choice in the battlefield. Humane treatment of enemy combatants is touted as a selling point of the technology. Valuation is very high.
TravelZoo (TZOO) 215.75M 15.14 None Publisher of travel offers. Takeover/speculation could pop the share price. Reasonably valued. Competition is huge and differentiating their offerings from competitive ones is easier said than done.
VeraSun (VSE) 1.23B 13.27 None Ethanol producer. Attractive Valuation. The industry faces high corn prices and distribution hurdles. Growth is dependent on additional subsidies and a mandate that increases ethanol mix from the government.
Audible (ADBL) 240M 9.83 None Provides audio entertainment, information, and education programming on the Internet. It may get acquired by one of the bigger players like Apple or Amazon at a premium. On revenue multiple basis, the valuation seems reasonable. It is trading close to 52 week high. It is unclear when it will become profitable.
Elron (ELRN)359M 12.11 None Holding company whose group companies are in the fields of medical devices, information and communications technology, clean technology and semiconductors. Elron has about 90M cash and a good portion of the rest of the market cap accounts for the public companies in which Elron has interests. So, its large portfolio of privately held companies is valued very low. The valuation may stay low for an extended period of time as they find it hard to catch Wall Street’s attention.
SinoBiomed (SOBM) 165M 1.26 None Development stage bio-pharmaceutical focused on protein based therapeutics. Has 10 drug candidates in the pipeline. It has a Hepatitis B & C treatment product and a treatment for rheumatoid arthritis products in the Chinese domestic market. Trades in the OTC market. It is a speculative stock with high volatility.
Euroseas (ESEA)241M13.13 8.83 Dry Bulk Carrier. Currently 80% in long-term contracts but expects to bring it down to 40% in 2008 thereby hoping to take advantage of all-time high spot pricing. It has managed to keep the operating costs low. Low valuation. The fleet is old. Increasing spot exposure will ultimately result ibn more volatility, as the index is fickle.
Canadian Solar (CSIQ) 643M 23.45 None Manufacturer of Solar Cells & Modules expanding into Ingot/Wafer capacity. Has more than doubled after announcing an earnings surprise Attractive valuation. The stock trades at a forward revenue multiple of less than 1 Uncertainty of margins the company will realize going forward. The company has never been that profitable.



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