Three Speculative Plays for 300% in 2011
December 27, 2010
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RELATED TICKERS: ENG
, LBIX
, PKT
As promised earlier, I do have my usual list of small-cap suspects that I feel could outperform in 2011, but guessing a company will move up, and predicting it will shoot up by 300% or more are two totally different things. I'm going to attempt the unusual as always and predict the following tiny tots are going to triple in 2010. Remember that these are not recommendations to buy, nor do I currently own any of these companies, so you need to do your own research and not just click the buy button because "UltraLong mentioned it in his blog."
So without further adieu... three speculative plays that could return 300% in 2011....
Leading Brands (Nasdaq: LBIX)
Leading Brands is a company that nearly disappeared from the face of existence just two years ago. They traded as low as 5 cents before completing something like a 5 for 1 reverse split. I pretty much wrote them off as a goner. Somehow though, they have reigned in costs to keep them under control and FINALLY decided they'd focus their business on TrueBlue and their juice business -- i.e the only business that really is high margin and makes them money. Due to continued share buybacks and solid cash flow, Leading Brands has quietly been expanding into newer and profitable markets. They are looking at a forward P/e based on my projections of about 6 in 2012 and could grow revenue (for the first time in years) by double-digits. They've tried expanding into the West before, but never in China so this move excites me. Also don't negate their share repurchases. They're slowly removing outstanding shares and that will almost assuredly mean an earnings beat is on the way with fewer shares to compare profits against. LBIX is considerably off its five-year high of $36 so it has room to run here being 90% off that high. I wouldn't be shocked if LBIX made a run at $10 sometime this year.
EnGlobal (Amex: ENG)
EnGlobal is already in my TMFUltraLong portfolio for good reason. They are the brains behind the consulting and construction services which allow the oil and gas sector to keep going -- and their business is greatly tied into business in the Gulf of Mexico and the price of oil. Even though EnGlobal management will never admit that, it is! EnGlobal dipped below $3 recently, a sadistic level that it should have never seen. This is generally a highly profitable company with good cash flow that could easily trump analysts estimates in 2011. Also notice they haven't had an insider dump any shares in nearly two years! Oil is moving higher and EnGlobal is trending higher, this is not surprising to me by any means. Run with that trend in 2011 and look for EnGlobal to crank out in excess of 40c in EPS in 2011.
Procera Networks (Amex: PKT)
Procera Networks provides the technology behind broadband networks that allows companies to measure traffic demographics. They are literally right on the cusp of turning profitable. They are growing revenues in double-digits, have 7 million in net cash and should be able to reap the benefits of the product expansion they put into place in mid-2010. Out of this bunch, this is the technical play du-jour because they have been stuck in a rut for MANY years and could easily break out of this channel to the upside with hardly any resistance (aside from the sadistic 112M outstanding shares). I don't think you'll get a mind-numbing profit from Procera, but you'd be surprised what a reaction you can get from shareholders if Procera reports a 4-6 cent profit for the full-year in 2011, which is what I'll be looking for. All this needs is a volume push and it'll likely spike higher.
For those of you looking for Artificial Life (ALIF) on this list, trust me I considered including it, but there are just too many outstanding shares, and ALIF dilutes shareholders too often for me to think it'll move 300%... now 100% seems absolutely doable though!
Remember again, these are exactly what I implied, highly speculative small-cap plays. Do your homework or get an F....
TMFUltraLong
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