The 3 Best Small Caps to Own This Fall: A TFN Special Report
Today's Financial News - Posted September 22, 2008
A TFN Special Research Report: These 3 small-cap stocks point the way to big gains in the final quarter of 2009. Grab up these bargains FAST to maximize your returns.
By Laura Cadden, TodaysFinancialNews.com
Best Small Cap #1
A poor man’s Starbucks: Javo Beverage Company, Inc. (OTC:JAVO)
Ah… coffee. Coffee addicts NEED their java. But we’ve already seen that in tough times, people are stepping away from the Starbuck’s counter.
That’s where these guys come in.
Good, fast and CHEAP coffee
Javo Beverage Company, Inc.’s main focus is on dispensable tea and coffee. The company manufactures and markets beverage concentrates, as well as formulations, extracts and flavors, to restaurants and retail outlets.
A sampling of their client list includes 7-Eleven, Sysco Food, BP Products North America, Exxon-Mobil, Mrs. Fields, Haagen-Dazs, Caribou Coffee, Sunoco, Shamrock Foods and Speedway.
Javo greatly increased their outlet potential in the second quarter of this year resulting in excellent results primarily from iced coffee sales.
On July 30, the company announced record revenues for the second quarter of 2008 of 6.7 million. A record gross margin of a remarkable 49% was also achieved for the quarter.
And they show no signs of stopping
| Javo Beverage Company, Inc. 1311 Specialty Drive Vista, CA 92081 United States 1-760-560-5286 (Phone) http://www.javobeverage.com |
Javo’s target for dispenser installation for this year was 7,500. They achieved that goal by the end of July.
Turning to their hot coffee product, they are now ready to have 10,000 dispensers in place by year’s end. Each new location is anticipated to produce between $3,000 and $6,000 in revenue annually.
Tasty black gold – for less than $1 a share
This company is one of the most promising small caps I’ve seen this year and the price is below $1!
What’s not to love?
I recommend you buy shares of Javo Beverage Company, Inc. (OTC:JAVO) for at or under $0.60 a share.
Best Small Cap #2
On the cutting edge of retail: The Home Shopping Network (NASDAQ:HSNI)
Her name is Mary-Ann and she is an addict.
Her addiction? The Home Shopping Network (HSNi) owned and operated by HSN, Inc.
Mary-Ann (actually NOT her real name) tells me that she can’t help it… the convincing chatter by charming hosts, the phoned-in testimonials, the seemingly reasonable prices, the “limited number available” push, and the countdown clock – it just wins her over every time.
She’s not alone… The 24/7 HSNi channel reaches 90 million households in the U.S.
And in 15 million of those homes, they also have the latest technological advance in TV purchasing – Shop By Remote.
In addition, HSNi has one of the top 10 e-commerce websites (http://www.hsni.com).
Cornering the market
HSN Inc. has another operating segment, Cornerstone, which is made up of seven popular brands including The Territory Ahead, Smith+Noble, Frontgate, Ballard Design, Garnet Hill, Improvements and Travelsmith.
Each brand has its own website and catalog (400 million are mailed out annually!).
A “new” stock
HSN, Inc. began trading on its own in late August.
Formerly, it had been part of IAC/InterActiveCorp (NASDAQ:IACI) but was spun off along with Interval Leisure Group, Inc. (NASDAQ:IILG), Ticketmaster (NASDAQ:TKTM), and Tree.com Inc. (NASDAQ:TREE).
Timing is everything
| HSN, Inc. 1 HSN Drive St Petersburg, FL 33729 United States 1-727-872-1000 (Phone) http://www.hsn.com/ |
Since the separation (and the volatile market in recent weeks) the stock price has decreased in value.
Its current PE ratio is hovering around 6 – always a good thing!
Most importantly, these people KNOW how to sell and with the peak retail season fast approaching, I expect this stock price to climb steeply.
I recommend you buy shares of HSN Inc. (NASDAQ:HSNI) at or under $12.
Best Small Cap #3
Failure to merge = good news for you: Take-Two Interactive Software, Inc. (NASDAQ:TTWO)
After prolonged negotiations, Electronic Arts Inc. (NASDAQ:ERTS) will not be purchasing Take-Two Interactive Software, Inc.
News of this prompted seven-year lows in the stock price of Take-Two providing a great buying opportunity.
Highway robbery
Take-Two’s claim to fame (or infamy, depending on your perspective) is its “Grand Theft Auto” video game series.
Wildly successful, these games often top the list of objectionable entertainment due to their seeming glorification of criminality and excessive violence. (No doubt that accounts for much of their popularity.)
A sampling of Take-two’s other franchises include Sid Meier’s Civilization, Manhunt, BioShock, Sid Meiers’s Railroalds!, Top Spin, Sid Meier’s Pirates, and Max Payne.
Headquartered in New York City, the company’s publishing segment is made up of Rockstar Games, 2K Games, 2K Sports and 2K Play labels.
Can’t argue with the numbers
After a showing a negative balance in 2007 (with a net margin of –14.10%), Take-Two clearly buckled down their operating expenses. That, and the over 6 million(!) copies of Grand Theft Auto IV sold after its April release, resulted in an increased net margin of 11.95% as of Q3 (ending July 2008).
The company’s PE ratio is just under 12, its forward PD is 10.81 and its PEG is an amazing .56. Now with recent market devaluations, these numbers are not the full picture, but they are still indications of a good investment.
On the table
The Take-two executive chairman of the board, Strauss Zelnick, has said that the company is communicating with other parties to consider “strategic alternatives.”
| Take-Two Interactive Software, Inc. 622 Broadway New York, NY 10012 United States 1-646-5362842 (Phone) http://www.take2games.com/ |
Any additional takeover bids should be good for shareholders.
‘Tis the season
Besides the decent fundamentals, profits and buyout possibilities, there are all those fans that failed to get “GTA IV” in the spring. They will no doubt be placing it at the top of their hoped-for holiday gift lists, which should give the stock price a nice bump.
I recommend you buy shares of Take-Two Interactive Software, Inc. (NASDAQ:TTWO) at or under $21.
Next Article: Japan’s retail champ: Buy Fast Retailing (FRCOF)
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