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Loose
Ends: Stocks For Our Style & Sector Forecast |
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 Since
we have time and room to do so, today we want to round out some of our
previous sector, style, and broad market forecasts with a handful of specific
companies that seem to be well-positioned within their respective category.
Rather than
'cherry pick' stocks based on news and opinion (and a glance at the chart),
the Micro Cap Press research staff has narrowed down the the number of
ideas using strict fundamental and technical criteria. Even so,
there's no magical success formula using this technique. Therefore, the
usual caveats apply...past performance is guarantee of future results,
things can and do change, your own due diligence is always merited, etc.
We've tried
to stick with micro caps when possible, though our primary goal is to find
opportunity - not find stocks to fit a mold. Also, while we feel
all of these stocks are at least worth considering as short-term and/or
long-term ideas, bear in mind we probably won't follow up on many if any
of today's comments. However, we'll be glad to open up our forum (the blog)
to discuss these names or any of your picks in greater detail. More on
that below.
Without getting
into too much detail, the following companies are being highlighted due
to a combination of low P/Es (relatively), growth in the top and/or bottom
lines, and the sustainability of their business interest. We also looked
for decent liquidity, and a current chart that at looked like it was pointed
in the right direction....or at least could be soon.
Utilities:
If you want proof that there's more to performance than just last quarter's
top line increase, then look no further than AMEN Properties (NASDAQ:
AMEN). Revenues fell by 17%, but earnings actually increased
by 27%. AMEN isn't actually a utility - they're a shell company looking
to acquire other energy-related businesses. Their revenue is derived from
their energy brokering and consulting activities, which they seem to be
able to do quite well. Their long-term growth has been phenomenal, yet
the company may still only be scratching the surface. What's the catch?
The market cap of just under 13 million and limited daily volume makes
it tough to trade. We believe both could improve over time, but caution
is advised until then.
 Technology:
You don't necessarily have to blaze new trails to make big money. Sometimes
you just have to improve the existing ones. That's exactly what
Immersion Corp. (NASDAQ: IMMR)
is doing in the world of technology. They develop touch-screen functionalities
for everything from PDAs to surgical equipment. And, they seem to be turning
the corner in terms of fundamentals, only swinging to a profit a couple
of quarters ago. That's why we like them now as opposed to a year
ago or a year from now - it may still be an undiscovered opportunity.
Health Care:
We
didn't actually get a chance to look at health care in dept6h back on the
10th. Let's just say at the time, the sector was lagging. Between then
and now though, it looks like things have improved quite a bit - which
means some of these names may be undervalued stocks. One of the companies
in this group that caught our eye was Trimeris Inc. (NASDAQ:
TRMS). This biotech outfit is realizing current revenue - and
generating profits - with its antiviral drug FUZEON. The overwhelming
attraction, however, lies in FUZEON's potential to be an effective treatment
for HIV. In other words, there's a current win and possibly a huge
win down the road. The current P/E of 7.8 seems almost bizarre, but
even the forward-looking P/E of 20.6 is powerful by biotech standards.
That's all we
have room for today. However, we'll round out the sector discussion - with
names - in a future edition.
 Though
the sectors are starting to show some disparity, it's still too soon to
spot any meaningful differentiation within the world of styles and market
caps. Nonetheless, we still feel our relative strength analysis is on target.
And what was that analysis exactly? Our research suggested that small cap
growth then large cap growth stocks were primed to lead the charge.
Rather than
even bother trying to find a solid small and large cap name among the hundreds
of growth stocks out there, the easiest strategy may just be to own a piece
of the entire segment. There are a handful of fairly liquid ETFs that fit
the bill. The iShares S&P 600 Growth Fund (AMEX:
IJT) and the iShares S&P 500 Growth Fund (AMEX:
IVW) are probably the easiest way to get on board, though the Russell
and Dow index versions now have a pretty strong following too.
There's nothing
as high-octane as individual stocks, but they can also be the trickiest
instruments to work with. Sometimes ETFs are just a nice change of scenery.
Though we only
highlighted a few companies today, we'd be the first to conceded there
are dozens of great stocks in each of these sectors or industries. If you've
got an alternative idea, or some additional thoughts on one of ours, please
feel free to share them.
To provide feedback
directly to our editorial staff, you can use the link below. However, we
encourage everyone to make comments using our blog (which
is accessible here). The blog lets you anonymously post your feedback
for everyone to review, and is a great chance for our community to learn
and share with one another.
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Updated: 9:18 am PST (17:18 GMT), January 5, 2009
