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Three Speculative Plays for 300% in 2011

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December 27, 2010 – Comments (21) | RELATED TICKERS: ENG , LBIX , PKT.DL

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

21 Comments – Post Your Own

#1) On December 27, 2010 at 11:02 AM, Pennyperson (< 20) wrote:

Cool- do you have a favorite out of the three?

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#2) On December 27, 2010 at 11:18 AM, EnigmaDude (51.18) wrote:

Thanks for going out on a limb and sharing your speculative picks.  I have not looked at EnGlobal for a while but I used to own some shares.  Unfortunately, the market does not seem to like them very much and I ended up selling my shares at a small loss to avoid a much bigger loss.

Looking at their latest earnings report, I am not convinced that they have turned things around:

Third Quarter 2010 Highlights Compared to Third Quarter 2009:

$(0.19) earnings per diluted share, a decrease from $0.00, with $(0.03) per share from operations and $(0.16) per share from a pre-tax charge

Revenue of $85.8 million, a decrease of 1.7%

Consolidated gross profit margin as a percentage of revenue of 7.5%, a decrease from 8.2%

Positive cash flow from operations of $2.2 million for the nine months ended September 30, 2010

31.6% increase in long-term debt

Perhaps 2011 will be a better year for them but I don't think I will be buying shares any time soon.

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#3) On December 27, 2010 at 6:37 PM, PickThatBooger (30.24) wrote:

Yeah, I picked up some of that LBIX for 1.80 in March. Low float/Low Volume, so if the market is running look out! And Visa Versa.

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#4) On December 27, 2010 at 6:53 PM, PickThatBooger (30.24) wrote:

I'd like to add 2 spec plays to that list, $MMG and $JTX

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#5) On December 27, 2010 at 8:03 PM, Pennyperson (< 20) wrote:

My upside call is CRTP, but not 300% - how about 100% =)

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#6) On December 27, 2010 at 9:52 PM, chaimyl (93.20) wrote:

In Jan 2010 you wrote a similar blog 

http://caps.fool.com/Blogs/four-speculative-plays-for/322191 

writing pitches for the following stocks which as of now are: ALIF -12% , KAZ -25% , MCZ  167% (jumping 100% only in the last 2 months), VLNC +84%  

http://www.google.com/finance?

 

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#7) On December 28, 2010 at 3:37 PM, openhandedgrouse (< 20) wrote:

THANKS UL,

I just purchased a new speculative position in PKT(500 shares and will buy up to 500 more) and LBIX (200 shares). I will also keep an eye on ENG to see if it gets a little cheaper before I jump in, as it has gone up about 40 percent recently. 

My only oil/NG play right now is a CHK $25 call for 2013.  I also own shares of NIV (1000), CIM(200), ALIF.OB(800) and BSPM(200). Hopefully this will be an interesting and profitable combination in 2011. 

GLTA and Happy New years! 

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#8) On December 29, 2010 at 10:49 PM, MichaelHamilton (98.91) wrote:

all  to speculative for me, these are very small caps which won't get any attention from the big boys, best ignored in my view

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#9) On December 31, 2010 at 1:16 PM, Twirpy (47.92) wrote:

Thanks UL, love following your picks. Since your prediction is for the next year, I know you are talking about the short term demand for oil. http://www.gulfspilloil.com/us-crude-oil-price-and-demand-projections-for-2011-go-up. Not that it will effect the short term, but did you consider that we may be at the start of a long term decline in demand?  http://www.post-gazette.com/pg/10355/1112268-185.stm?cmpid=autonews.xml.  Just saying, because some people, not you necessarily, think anything about oil automatically has dollar signs attached. That may not be true in the long run, so as a condition to the short term buy advice, I would add that people planning to hold onto stocks for a long time may want to consider the long term decline in demand for oil, before picking up positions in the oil industry.

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#10) On January 01, 2011 at 9:39 PM, rexlove (99.73) wrote:

An update on last years 300% speculative picks UL. To be fair I based it on a 1/05/10 start date and close on 12/31/10.

KAZ -  start price: $1.18 close $.86  change: -27.1%

ALIF - start price:  $1.05 close $1.02  change: -2.8%

MCZ - start price:  $0.39  close $1.02  change: 161.5% 

VLNC - start price:  $0.91  close $1.68  change: 84.6%  

No 300% winners but if you had invested equally amongst the 4 stocks you would have made 54%. Nice job UL.

 

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#11) On January 05, 2011 at 9:58 PM, TigerPack1 (33.58) wrote:

CSR - All Systems GO!

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#12) On January 07, 2011 at 4:26 PM, openhandedgrouse (< 20) wrote:

Obviously investors did not like the ALIF's decision to use their accout recievables to invest in small innovators.  Previously their account recievables was an area for concern for some investors. IMO ALIF is undervalued even if they don't collect a dime of their accuount recievables.  I believe their expansion to android and overall smart phone and I-pad growth will increase earnings and therefore their share price.  All there other aspects like accounts recievable, opus-M, augmented reality and these new investments are extras.     I purchased 700 more shares today at 0.76

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#13) On January 09, 2011 at 10:48 PM, boxxer55 (97.02) wrote:

Ultralong, thanks for making the picks.  I have a question about PKT but also a broader question about executive compensation.  I noticed that the top two guys are taking down serious salaries, the top guy takes about $450k annually.  What do you think about big paychecks for management in a company that is not making money?  My gut reaction is I would like to see more reliance on stock compensation and less on cash salary and bonus to keep interests better aligned.  The compensation levels at PKT give me pause.  I would appreciate your thoughts! 

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#14) On January 12, 2011 at 10:22 PM, openhandedgrouse (< 20) wrote:

Sold out of PKT today because they are suppose to have a 1 for 10 reverse split within the next month.  IMO there is a greater risk that the share price will decrease after split.  This should present a good buying oppertunity.  My sweet spot would be between $4 and $5. Ofcourse this is just speculation and there is also the chance that PKT could go up after the split.  

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#15) On January 16, 2011 at 4:48 PM, TreeDave (< 20) wrote:

Dear Ultra-

I had a fantastic year thanks to your recommendation on NTWK. As you probably know it went from high $0.70s to $2.10. Seems that there is a lot of news and possibilities in the pipeline for the Ghauri brothers. Could you please give me your 0.02 in NTWK's for 2011?

Thanks!

 TreeDave 

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#16) On January 18, 2011 at 12:48 AM, StockMillionare (< 20) wrote:

stockmillionare's pick of zagg from his pick of $7.53 to triple by last day of 2011, up already around 25 percent from Jan 3, 2011.

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#17) On January 18, 2011 at 12:47 PM, TSIF (99.97) wrote:

I enjoy speculative calls with some rationale. I had a nice ride on MCZ from last years calls and other Foolish bantering from several other Fools. I wish I'd sold more at $1.25 as it seems to be correcting back down heavily today, but could just be forming a base.

ON these three calls, I made a small play on PKT last week, but it didn't completely fill. I agree with openhandedgrouse that a reverse split could result in an initial decline, so I'll wait and watch this one.  At any rate, it will get UL the 300% and then some, on absolute share price! :)

I disagreed with ENG and my downpitch rationale is here.  I have my macaroni necklaces ready to offer up in appeasement.

I've yet to look at LBIX, but it appears to be off to a great start, up 25% already since UL called it.  It appears to be a little more complicated if it's refocusing and expanding as UL indicates.  Analysis of this one might be beyond my meager abilities.

My point here is that speculative plays will most likely move considerably over a year, one way or the other.  They are only for high risk/reward investors and I hope folks are doing some of their own DD AND personal risk/reward analysis before piling in.  Good luck.

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#18) On January 18, 2011 at 2:25 PM, dankgummy (< 20) wrote:

What about
Ecotality, Inc. 

(Public, NASDAQ:ECTY)

 

They are partnering with Nissan to do the charging stations, anyone have insight on them?

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#19) On January 27, 2011 at 12:19 AM, TMFUltraLong (99.38) wrote:

LBIX up nearly 60% so far and ENG shooting up nearly 30%.... a nice start.

TMFUltraLong

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#20) On February 21, 2011 at 5:34 PM, ikkyu2 (98.50) wrote:

Without further adieu: Viola!

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#21) On June 29, 2011 at 2:07 PM, williamjoneal123 (< 20) wrote:

#16 so far stockmillionare pick of zagg at 7.53 is winning up the spec plays for 2011 up over 100 percent so far and shows on signs of slowing.

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