subject: The Five Fastest Growing Companies Under $52 [print this page] Theres no question 2008 was a tough year for the stock market. But theres also no question about 2009 being a huge rally year. This rally wasnt sparked by a bloated government stimulus or cash-for-clunkers program. Rather, it has taken the form of consistent, growing small-cap stocks. And you ought to know, you could cash in on this rally too
But why are small-caps leading the way now? For starters, small-cap stocks historically lead the market out of recession, and in 2009 theyve been performing in a big way. Through the first half of this year, the small-cap Russell 2000 Growth Index gained 14.54% versus an S&P 500 thats only returned 4.71% much of that from a mid-July rally.
The stocks on our list all have growing earnings, are undervalued by investors, and are in good enough financial shape to weather any economic speed bumps that come our way.
And dont forget, its earnings season right now that means that scores of antsy investors are waiting to snatch up diamonds in the stock market rough Getting in now could mean having an edge on the competition.
Heres our list
So, other than the NASDAQ dominance, is there anything in common amongst these stocks? Well, youll find a lot of medical and technological stocks in this bunch. Below are some brief descriptions of each company
ICOP Digital, Inc (NASDAQ: ICOP) engineers, produces and markets mobile and stationary surveillance solutions for law enforcement. ICOP shares started the year at 16 cents and have quickly risen to $1 over the past few weeks.
Targanta Therapeutics Corp (NASDAQ: TARG) is a biopharmaceutical company focused on the development and commercialization of antibiotics for infections treated or acquired in hospitals and other institutional settings. The Medicines Company (NASDAQ: MDCO) recently announced that it would acquire 100% of Targantas outstanding shares. This news helped launch the stock from 61 cents to $2.50.
Zoom Technologies, Inc (NASDAQ: ZOOM) designs, produces, sells, and supports broadband and dial-up modems, voice over Internet protocol (VoIP) products and services, and Bluetooth wireless products.
Grill Concepts, Inc (NASDAQ: GRIL) develops, owns, operates, manages and licenses full-service upscale casual dining restaurants under the name Daily Grill and fine dining restaurants under the name The Grill on the Alley. With a market cap of only $6.8 million, GRIL shares have spiked from 24 cents to 77 cents over the past month.
North American Scientific, Inc (NASDAQ: NASM) designs, develops, produces and sells products for radiation therapy treatment, primarily in the treatment of prostate cancer. The recent jump in NASM shares has helped the company regain compliance with the NASDAQ Capital Market listing regulations.
California Coastal Communities (NASDAQ: CALC) is a residential land development and homebuilding company with properties owned or controlled primarily in Orange County, California, and also in four other Southern California counties. On Jan 2, the company sold 17 model homes for $25 million. The news helped push their stock from 56 cents to above $1.
Anadys Pharmaceuticals, Inc (NASDAQ: ANDS) is a biopharmaceutical company focused to develop medicines in the areas of Hepatitis C and oncology. Due to some positive news on a recent drug study, shares of ANDS have risen from $1.81 to $5.
Quantum Group, Inc (AMEX: QGP) is engaged in providing consulting and sourcing services for HMOs that market Medicare Advantage managed healthcare plans, as well as to healthcare providers in the state of Florida. In mid-January, QGP announced a multi-year service agreement with IBM.
Nextwave Wireless, Inc (NASDAQ: WAVE) is a mobile broadband and multimedia technology company that develops, produces and markets mobile multimedia and wireless broadband products, including fourth generation (4G) wireless broadband semiconductors.
Aviza Technology, Inc (NASDAQ: AVZA) designs, manufactures, sells and supports semiconductor capital equipment and process technologies for the global semiconductor industry and related markets. In early January, Aviza raised their net income guidance, which helped launch the shares from 10 cents to 30.
Incidentally, the 10 stocks above arent just the top penny stocks of January 2009; theyre also the top performing stocks on any of the major exchanges
Lets take a look, for comparison sake, at the top 10 stocks from the Dow during the first month of 2009
As you can see, theres quite a contrast in the top performers from each category. As youd probably expect, the top blue chips have had more modest returns than the top penny stocks. Although the performances of IBM and Kraft have been impressive thus far in 2009, those companies dont offer investors the same explosive growth potential that can be found with small cap stocks.
Even with the ongoing market mayhem, penny stock investors still have the opportunity to grab some big gains. Its not an easy task, but careful research and patient buying can pay some huge dividends down the road.
As 2009 Winds Down
So weve looked at 10 small-cap stocks that led the way at the beginning of 2009. But as the year winds down, its a good idea to take stock of which penny investments have the biggest potential for profits now. The top 10 from January could have given investors some very nice gains, but now there is a group of five new small-caps to keep a close eye on. These might fill your pockets very nicely heading into 2010
First up is Del Monte Foods (NYSE: DLM). This California-based company produces and distributes consumer food and pet products in the United States. And while the stock fell hard in October 2008, it bounced back even harder, gaining 23% in the months that followed.
Much of that recent performance has been thanks to stellar earnings growth. Del Monte has increased its quarterly income by 42% over the course of the last year, signaling to investors that while consumer demand was weak in late 2008, Del Montes ability to build its customer base isnt.
With Q2 2010 earnings scheduled for December 3, expect investors to be watching this company intently.
Tesoro (NYSE: TSO) is an independent petroleum refiner and retailer that operates seven refineries and more than 900 gas stations in 15 states. In total, the company transports 380,000 barrels of oil through its pipelines each day. Tesoro may seem like a surprising pick, given that it operates in the oil industry, where spot prices have fallen 57% since one year ago.
But downward pressure in oil prices has left independent producers like Tesoro oversold, and ready for a comeback. That valuation is clear from the stocks multiple TSO trades for just over four times earningsthat makes each dollar Tesoro makes a full 27 times cheaper for investors than the blue chips on the S&P 500.
The company is set to announce its Q3 2009 earnings results to the public on November 9.
Even though retail sales have taken a hit in this economic climate, there is one store chain thats seeing their sales hold strong Rent-A-Center (NASDAQ: RCII). The company, which is known for its low priced rent-to-own and installment sales stores of the same name, has been getting attention recently as Ben Bernanke and company warn that the global slowdown could last well into 2011.
At present, institutions like Barclays, Vanguard, and Bank of America own 95% of the company, and nows as good a time as any for smaller investors to follow the big money.
While not a household name like Rent-A-Center, our next stellar small-cap should be. Fair Isaac Corporation (NYSE: FICO) provides analytical data management programs to businesses that help increase customer value, and reduce fraud and credit losses. In an age of constant belt-tightening, this is one expense many companies will be happy to shell out.
Thats a sentiment thats shown itself on Fair Isaacs income statement: the company reported year-over-year income growth of 32% last quarter. Analysts are hoping to see profits on shares when the company reports Q4 2009 earnings on November 2.
Last on our list is the Empire District Electric Company (NYSE: EDE), a public utility that provides power, natural gas, and water to 215,000 customers in Missouri, Kansas, Oklahoma and Arkansas. Besides an attractive 7.3% dividend yield, this recession-resistance stock has managed 56% income growth over the last year through modest customer acquisitions and rate increases.
Empire is set to announce its Q3 2009 earnings on October 19.
Watch the Market, Maximize Your Gain Potential
This isnt the first time Ive talked about a specific stock in 2009 I wrote to my Penny Sleuth readers about a specific investment play in mid-January I was recommending shares of GP Strategies (NYSE: GPX) at $3.98. By mid-October, that stock was trading at $8.24 for a 107% gain.
While theres no guarantee that any of these five stocks will be able to repeat GPXs performance, theyre among the best positioned right now to pick up some impressive gains.
It looks like the markets having a tough time breaking through to another rally. But that doesnt mean that stocks are down and out just yet. Watch the market closely If the S&P 500 breaks out above 960, it could be a phenomenal time to buy some of the penny stocks I just told you about.
