The market got off to a tough start for the week today as Europe again came back into focus. I took advantage of the sell-off to pick up some cheap domestic small cap stocks. One stock I took a position in for the first time was Support.com (SPRT) which has strong insider buying, a robust balance sheet and improving growth prospects.
7 reasons SPRT is a good pick up for growth investors at under $3 a share:
- Insiders have bought 600,000 shares of new stock over the last year.
- The stock has over $50mm in net cash (1/3 of market capitalization) on the books.
- Earnings are going in the right direction. The company lost 26 cents a share in FY2011 and is projected to lose only 12 cents a share in FY2012. Analysts expect the company to make 12 cents a share in FY2013.
- Sales growth is impressive as analysts expect between 25% to 35% sales growth for both FY2012 and FY2013.
- The three analysts that cover the stock have a median price target of $6 a share on SPRT, double the current price. Targets range from $4.75 to $7 a share.
- The company was within $400K of being cash flow positive last quarter.
- Consensus earnings estimates have increased for FY2012 and FY2013 over the last three months and the company has beat or met earnings for the last four quarters.
Disclosure: I am long SPRT.