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In an attempt to duplicate my recent finding of the, then micro cap, ZAGG (NASDAQ:ZAGG), I developed a screen that targets micro cap stocks with strong price performance and solid upside potential. This screen includes the following parameters:

  • Market Cap. < $300 million
  • Average Analyst Recommendation = Buy or better
  • Year-to-Date (YTD) Price Performance > 50%
  • Quarter Price Performance > 20%

The results of the screen currently yield about 30 stocks. Sifting through the results in search of upside potential is a challenge; recently three stocks caught my eye. There are as follows, sorted by annual price performance:

1. ATA, Inc. (NASDAQ:ATAI) has grown from a $72.80 million market cap a year ago to a current market cap of $246.4 million. The company holds a current analyst recommendation of 2 strong buys with an average profit target of $15.00, about 50% above its current price level. Though the company had an $840 thousand annual net loss last year, ATA, Inc. currently holds a one year stock performance of 225.00%, a YTD performance of 167.12% , and a one quarter performance of 24.84%.


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2. Silicon Motion Technology Corp. (NASDAQ:SIMO) has grown from a $146.35 million market cap a year ago to a current market cap of $405.28 million. The company holds a current analyst recommendation of 1 buy and 4 strong buys with an average profit target of $15.10, about 50% above its current price level. Silicon Motion Technology Corp. had a $3.5 million annual net profit last year and currently holds a one year stock performance of 97.29%, a YTD performance of 140.00% and a one quarter performance of 25.31%.


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3. BioSante Pharmaceuticals, Inc. (BPAX) has grown from a $125.43 million market cap a year ago to a current market cap of $292.94 million. The company holds a current analyst recommendation of 4 strong buys with an average profit target of $5.50, about 100% above its current price level. Though the company had a $52.9 million annual net loss last year, BioSante Pharmaceuticals, Inc. currently holds a one year stock performance of 57.95%, a YTD performance of 69.51%, and a one quarter performance of 41.12%.


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In comparison to the S&P's annual return of 25.6%, these three micro caps stand strong with an average annual return of 126.75%. All of the three stocks currently hold an average strong buy analyst recommendation and show very good upside potential with an average analyst price target of 67% above the stock's current, respective price. These stocks are intriguing to say the least and, with their significant upside potential, deserve a second look.

Company information found at seekingalpha.com and kapitall.com.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 3 Micro Caps With 50% Upside Potential