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The Big Case for Small Caps

04.06.2010

Small-Cap Stock #1: The Chic Geek

You need a Ph.D. to fully understand this technology, but in a nutshell this company provides high-tech semiconductors for use in cutting-edge products like fiber-optic components and lasers. In the fourth quarter, sales rose 42% to $157.77 million compared with the same quarter a year ago. During the same period, the company's earnings rose an unbelievable 346% to $44.5 million compared with $9.97 million! In the past month, the analyst community has revised its consensus earnings estimate a whopping 179% higher. Typically, such strong analyst earnings revisions precede future earnings surprises. This high-tech company is set to be a high flyer as its next earnings report comes out.

This company is your one-stop custom tech shop. If you have a new product, you want these guys on the case. They are able to customize what you need with an incredibly short turnaround time. That's exactly what companies need when they are racing to bring new products to market. In its latest quarter, the company's sales increased 47%, while its earnings rose to 25 cents per share. This represented a whopping 78% earnings surprise and a 12% sales surprise. Industry analysts have raised their earnings estimates over 71% higher during the past month, and I think they may still be underestimating this small-cap leader.

Small-Cap Stock #3: The Powerhouse

My third small-cap stock allows companies to replace several power management components with a single device. That means if you use this company’s products, you get more power in a smaller package. The company designs and markets low-voltage power supply chips, including switching regulators for communications and networking applications. In the fourth quarter, the company's sale rose 56% compared with the same quarter a year ago. During the same period, earnings rose 600% compared with the same quarter a year ago. For the current quarter, the analyst community is estimating 90% sales growth and a staggering 766% earnings growth.  During the past three months, analysts have revised their consensus earnings estimate a substantial 115% higher.

With products, services and numbers like these, you can see why I’m so excited about owning small-cap stocks right now. If you’re interested in owning these companies and getting the names of all the 29 small-cap stocks on my Emerging Growth Buy List, check out this special offer for What’s Working on Wall Street Now members.

As always, I'll be in touch with you again next Tuesday, April 13, with our next installment of What's Working on Wall Street Now. Until then, take care!

Sincerely,
Louis Navellier
Louis Navellier


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