Has Wall Street Missed These Six Power Potentials?
Bulls need protein and investors need alpha. To power 2013, we introduce six companies that the Street has likely overlooked, as these companies are strongly poised for growth. We would not, of course, leave out why. For investors who want to get a jump on the Street, our targeted picks have the meat to feed alpha.
Asure Software (ASUR)
Every business needs to run a tight ship. Navigating changing currents requires taking a business to the next level, which means understanding the workplace in 2013 and beyond. One company that has mapped a steady course is Asure Software.
Asure has been charting its way to growth through acquisitions, which include its purchase of ADI Software, LLC in 2011 and its more recent $9.8 million cash purchase of PeopleCube in 2012. Asure's technologies advance facility management and employee recognition. The Company's platform empowers customers to significantly reduce real estate costs, as well as enhance employee security through its product lines, NetSimplicity and iEmployee.
The Company is devoted to capitalizing on the trends in real estate utilization and workplace collaboration. The five 2013 trends the Company has identified are: 1) the growing use of smart devices 2) space utilization of commercial real estate 3) advances in biometric and facial recognition 4) integration of SaaS and Haas in the cloud 5) closer collaboration and integration of databases for business operations.
The Company's current market cap is $35.5 million. Asure booked Q3, 2012 revenue of $5.7 million, up 35 percent or $1.5 million over Q2 2012. Cash and equivalents also increased $1.3 million in the same period or 83 percent over Q2 2012. Recurring revenue also rose to 80 percent in Q3 2012, up from 75 percent in Q2 2012. Most notably, Asure's revenue rocketed year-over-year (Q3 2012 and Q3 2011) by 226%. Savvy investors should book room in their portfolios to allow for this security.
Blue Earth, Inc. (BBLU.OB)
Hoping for blue skies? When it comes to alpha picks, forecasting with Blue Earth, Inc. makes sense. Blue Earth is one of the leading clean-tech industry companies with the position and insight for exceptional growth through acquisitions. Blue Earth targets technologies and services which capitalize on the renewable energy market.
Along with acquisitions, the firm forms strategic joint partnerships. A prime example is the Company's agreement with Hareon Solar Technology Co., Ltd., to jointly develop a 497 kilowatt solar PV project on the island of Oahu in Hawaii.
The Company also operates and invests in solar plants throughout the world. Among Blue Earth's many investments is Castrovilla, Inc. .Castrovilla, Inc. has become a statewide and regional supplier of utility scale energy efficient market through the customization of turnkey, vertically-integrated small commercial services to small businesses and local utilities.
Blue Earth's current market cap is $23.2 million with 19.5 million shares outstanding. The Company, however, is anticipating revenue of $100 million-along with anticipated EBITDA of $10 million-for 2013. These projections portend blue skies for investors.
Implant Sciences Corporation (IMSC.PK)
Is it safe to invest in the markets? We think this company makes it so. Implant Sciences Corporation manufactures scanners that detect both explosives and drugs. The Company's Quantum Sniffer™ recently cleared the Air Cargo Screening Technology List requirements. In fact, IMSC became the first American company to do so. This achievement, which was announced on January 16th, resulted in a 22% surge in the Company's stock.
Growth is also likely for a number of other reasons. The current market cap is $61.87 million, with a diluted normalized EPS of .31, at a close price of $1.41 per share as of January 25, 2013. Meanwhile, Implant's competitors trade at much higher valuations. We believe the Company price will therefore align this year with market value. Assuming a 20% demand increase of Implant's products, the Company should generate approximately $66 million in annual revenue, $20 million gross revenue, and $10 million of EBIT on average over the next three years.
Underlying the secure prospects for growth, the Company has a sales pipeline with prospects that include the Transportation Security Administration (TSA), UPS, FedEx (FDX) and DHL. Implant is working vigorously to secure the market for broader applications. The benefits of this potentially life-saving technology are being sought for school security systems, prisons, government buildings and recreation facilities around the globe. Word on the Street is Implant's growth record means it could one day, in the not too distant future, list on one of the big boards.
Meanwhile, government and non-government agencies around the world, from Singapore to Bahrain to China, have been signing up for Implant's technology. The nuclear power industry in Japan alone has placed five orders in the last five months. In November of 2012, the Company also inked a deal with a new client in Germany that will use Implant's handheld devices to inspect air cargo shipments.
A safe bet for growth? Yes. Safe and sound.
LRAD Corporation (LRAD)
What's that buzz? Likely that's the sound of the bulls getting ready to charge with LRAD Corporation. The Company develops direct acoustic products that focus and control sounds over both long and short distances. The products enhance the following:
- crowd and riot control
- emergency responder operations
- fire/HAZMAT evacuation and communication
- hostage negotiations
- infrastructure and perimeter protection
- large crowd communications
- mass notification
- search and rescue operations
- security zones enforcement from remote locations
- SWAT operations
- warrant serving.
Since February 2011, when LRAD secured an order from the U.S. Navy, the customer list has expanded to include Israel's Ministry of Defense, the U.S. Pentagon, off shore oil clients, foreign police services, the U.S. Air Force, an Asian maritime division, the U.S. Army National Guard, a Middle East law enforcement agency, an Asian port city, and a regional U.S. law enforcement division.
For the third consecutive year, the LRAD brought in profits with revenue of $14.8 million for fiscal year 2012. During this period, LRAD's U.S. revenues grew by 195% over the previous year 2011, while the Company's working capital grew by 12%. The Company's current market cap is $35.61 million, with a P/E of 27.5. Added to all this, LRAD has nearly $21 million in net assets and no long term debt. That's the sound of a strong small cap.
Lightbridge Corp. (LTBR)
Lightbridge Corporation is a nuclear fuel technology company powering up the nuclear sector's advancement. The Company has two divisions: a nuclear fuel technology group and a business consulting group.
Lightbridge serves as one of the leading nuclear power consulting and strategic advisory services to both commercial and governmental entities worldwide. Lightbridge's subsidiaries include Thorium Power, Inc., and Lightbridge International Holding, LLC. With its three fuel product lines, Lightbridge is poised to capture market share as it has developed the next generation of nuclear fuel. In a nutshell, the advanced technology allows existing reactors to produce more electricity for improved economics and longer fuel cycles.
The Company has earned patents from the U.S. government and other international entities, including Russia and South Korea.
Investors looking for a company with no long-term debt will note that Lightbridge has never had to bear that burden. With a market cap of $20.67 million, and an EPS of -0.42 analysts anticipate licensing revenues to generate, conservatively, $200 million. If the conservative projection bears out, ROI will be in the neighborhood of ~300%. Further, Lightbridge is the current lowest valued company in the nuclear market, evidenced by comparison to its competitors such as Vringo (VRNG).
To date, there are 66 nuclear power plants under construction, and with clients that include Duke Energy (DUK), Dominion (D), Exelon (EXC) and Southern Company (SO), we fully anticipate Lightbridge will power alpha this year.
MagneGas Corporation (MNGA)
Looking for a clean play? Try MagneGas. The Company has produced and introduced a new form of clean burning fuel that can power home cooking, heating, natural gas biofuels and metal cutting. With its patented technology, liquid waste is transformed into MagneGas, which converts sewage, animal manure, waste water and other products into a cleaner alternative than the current three traditional forms of fuel: gasoline, diesel and natural gas.
MagneGas entered the capital markets in August of 2012, issuing 2.85 million shares of common stock at $3.00 a share. As the Company experiences ongoing demand, we expect ROI to produce a turnaround towards positive territory. As of fiscal year-end (September 30) 2012, MagneGas had $12,782,409 in total assets, a 208 percent increase from previous year (December 31) 2011.
In September of last year, the Company received a patent on its Plasma-Arc-Through Apparatus and Process for Submerged Electric Arcs. In that same month, MagneGas announced that Capital Scrap Metal LLC-based in Florida, along with its distributor Cut-It Up Gas & Supply LLC, booked its first order to use the Company's fuel.
MagneGas' foothold expanded in December of 2012, when Sustainable Green-- a recent Seattle-based distributor of industrial gas-- announced that it had pre-purchased $1 million worth of the Company's fuel for a two year period. That recent deal specifies that Sustainable Green will be the exclusive distributor of MagneGas fuel in Washington and Oregon for a minimum of two years, subject to continued forward purchases. In addition, Sustainable Green will be permitted to sell the MagneGas fuel in any other territories where there is no exclusive distributor.
MagneGas, a clean alpha play.
Investors should be aware that each investment carries its own risk. Some equities are more speculative than others. In particular, investors should be aware that additional risks may exist for some smaller cap and microcap stocks which trade at a discount when compared to stocks in the same sector, as these stocks may have notable company risks that could lead to lower valuations. Stock price manipulation may take place in the case of microcap stocks, as both a result of fewer firms trading the equities, or high distress within a specific company or market segment. Further, liquidity risk may be introduced in some instances where small trading floats and low volume creates large spreads and high volatility. Investors should thoroughly investigate any stock by performing due diligence before trading.
DISCLAIMER: Past performance is not a guarantee or a reliable indicator of future results. This article contains the current opinions of the author and such opinions are subject to change without notice. This article has been distributed for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. Neither the writer nor distributor of this article have any positions in any of the companies named.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.