My top 3 home run picks for 2011
OK, so I can't help myself after reading UltraLong and others' predictions. And I am looking for some feedback on my selections. Here are 3 micro-cap growth stocks with momentum and what I consider to be a strong business model and which I expect to significantly outperform over the next 12 months or so. Each of these picks I own in my real life portfolio.
First is a gold-oriented pick and that one is Sandstorm Resources (SNDXF.PK). It is a streaming precious metals business and CAPS member speedybure has an excellent write-up on it here.
Next is Lucas Energy, Inc. (LEI). With a market cap of only about $30M and with only 4 employees, this is quite a speculative oil and gas play. I first learned about this company from an article by Josh Young in Seeking Alpha. Shortly after I read the article I came across a press release with some encouraging news:
Lucas said an internal report revealed the potential reserves of its Eagle Ford assets were an estimated 4.3 million barrels of oil equivalent as of Sept. 30, compared with the 2.7 million as of April 1 as estimated by a consulting firm.
The net present value, at a 10% discount rate, of the potential reserves was $83.6 million, compared with the earlier $51.9 million estimate by consultant Forrest A. Garb, the company said.
Read more: Lucas Energy Up; Eagle Ford Reserve Estimates Raised - Investing - Dow Jones Newswire - SmartMoney.com http://www.smartmoney.com/news/on/?story=on-20101129-000278#ixzz19Wfahz1q
And my 3rd big-hitter for 2011 is a technology stock - Magic Software (MGIC). Some might think that 2010 was the big year for this stock, and they would be correct! It has shot up in the past few months from a low of $1.55 to over $8 and now is trading for closer to $6. However, I feel that the growth of this Israeli software company is just beginning and the demand for their products will rise exponentially as businesses look for ways to create efficiencies through system integration and as they furrther embrace the cloud computing paradigm.
I would look for a better entry point (below $5) to get in if you are looking to get long on this company, but I believe that within a year this stock could easily trade for upwards of $10 and over the next 5 years it could run substantially higher.
Thanks for reading, Fool On,and Happy New Year!