2 Small Cap Winners
Today's Financial News - Posted April 9, 2009
by Laura Cadden, TodaysFinancialNews.com
Shares in GM cost less than a gallon of gasoline.
A share of MGM Mirage costs half of a movie ticket at the multiplex.
And you may have enough change in your car’s ashtray to buy two or three shares of Citibank.
With Donald Trump blue chips now available at Donald Duck prices, why would anybody want to look at small caps?
One word…
Upside
Like most blue chips, small caps are trading at depressed prices. Many will fold, de-list, and/or file for bankruptcy before the crisis in credit and consumer demand has run its course.
But there is a phalanx of rock-solid companies—with solid fundamentals, competent management, and breakthrough products—that are leveraging the crisis into a competitive advantage.
Smart investors who buy shares in those companies now stand to emerge not just with gains in their portfolios… but an owning legacy stake in the financial cornerstones of the new economy.
The TFN team specializes in cherry-picking these “Damn Good Stocks” from the smoking ruins of the world’s stock markets.
But like always, the key to successful investing in a highly volatile market environment like this is timing. The stocks you own must either be in a position to ride out these stunning declines in the long term. Or, if you’re gunning for short-term profits, you need to be able to move rapidly… buying low when markets tank—and taking gains when they recover.
That’s how Hot Stock Confidential Members were able to take gains on our recommended stock picks since January… like 20% on Bruker (BRKR)… 18% on Guangshen Railway (GSH)… 30% on Valence Technology (VLNC). Or the 21% we made on Carmax (KMX)… the 24% on Aastrom Biosciences (ASTM)… 24% on Alon (ALJ), and the 20% on SuperValu (SVU).
Soon, our editors will be closing out a 91% gainer on a little known transportation services holding companies!
But right now, we believe the time is right to invest in these two small-cap stocks… both for the long term… or for the short term!
Small Cap Winning Stock #1: Spartan Motors, Inc. (NASDAQ:SPAR)
Market Cap: $180.53 million
In February, this company announced that 2008 was the best year in its history.
Incredible?
Its revenues increased by 23.8% over 2007 and its net earnings were up by an incredible 74.3% from the year prior.
Spartan Motors, Inc. designs and manufactures chassis and bodies for specialty vehicles including ambulances, fire trucks, emergency rescue and military vehicles, tankers, motorhomes, and utility trucks.
Headquarted in Michigan, company’s brand names include Spartan, Road Rescue and Crimson Fire.
The huge drop in motorhome sales impacted the chassis line Spartan makes for them. But safety regulation changes led to a significant boost in Spartan sales related to fire trucks and other emergency vehicles.
The future
Though the company is not anticipated to match the financial success of 2008 this year, the folks at Spartan see opportunities for their mine-resistant vehicle line.
The service and sustainment agreement between Spartan and Force Protection, Inc. (NASDAQ:FRPT) announced in early April shows this continuing market demand. The agreement is in relation to Force Protection’s fleet of Cougar mine resistant vehicles.
| Spartan Motors Inc. 1000 Reynolds Road Charlotte, MI 48813 United States Phone: 1-517-543-6400 http://www.spartanmotors.com |
Growth is also expected in the emergency vehicle sector. The company has pending orders and federal government money directed in support of emergency operations should help bring in more.
Highlights: Spartan’s 52-week high was $9.98, insiders at Spartan are buying, and the P/E ratio is a lovely low 3.76.
Pick up shares of Spartan Motors, Inc. (NASDAQ:SPAR) under $6.50.
Small Cap Winning Stock #2: Hercules Technology Growth Capital Inc. (NASDAQ:HTGC)
Market Cap: $193.62 million
Hercules Technology Growth Capital Inc. is a finance company that provides debt and equity capital to private equity-backed technology and life science companies.
I know, I know… an investment firm?!
But in late March, Hercules announced it had completed the repayment of a $130 million credit facility with Citigroup and Deutsche Bank – one month prior to its due date!
This tells me the people at Hercules are more cautious and capable than most of their colleagues at other firms.
| Hercules Technology Growth Capital, Inc. 400 Hamilton Avenue Suite 310 Palo Alto, CA 94301 United States Phone: 1-650-289-3060 http://www.htgc.com |
Headquartered in Palo Alto, California, Hercules’s portfolio includes companies involved with biotechnology, medical devices, electronics and computer hardware, software, and semiconductor and components.
These are all areas marked for big growth potential.
Highlights: Insiders have been buying, the 52-week high was $11.35, its P/E ratio is 8.99, and best of all… this is a dividend stock.
Buy shares of Hercules Technology Growth Capital Inc. (NASDAQ:HTGC) under $6.50.
*** For more small-cap winners, sign up for our Premium Service, Hot Stock Confidential. Right now, our editors are looking into another Damn Good Stock…
a small, relatively unknown stock with a crackerjack product with a price of less than $4… and an upside of 35% in the next six months!
Simply click here to join us at our special introductory rate!
Next Article: When the tax man cometh, lock the door
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