With many
traders ignoring equities below five dollars, there is serious upside for those
willing to take on additional risk.
The
following stocks have strong indications for growth — including insider and
institutional buying, revenue growth, and expanding industries:
Mandalay Digital
Mandalay
Digital (NASDAQ: MNDL)
creates solutions for mobile platforms. These include tools to complete the
billing process, drive loyalty and predictive analytics for merchants to
suggest products.
Shares crashed in
August, kicking off a series of non-open market acquisitions from several
directors. In addition, institutions started aggressively building positions
and now own just over a fourth of the company.
Taking a look at
the financial statements, revenue has grown a tremendous 766 percent over the
past year to nearly seven million dollars for the most recent quarter. However
the company has become increasingly less profitable — losing $3.78 million a
year ago and $6.22 million for the same quarter this year. A key reason for the
increase in loss is an additional two million spent on product development.
The two
factors that will drive the 2014 share price are continued revenue growth and
an increase in dependence on mobile technologies. Shares are currently trading
at $2.65.
Revolution Lighting
Technologies
Revolution
Lighting Technologies (NASDAQ: RVLT)
produces LED products for commercial customers, typically in the hospitality, education, and healthcare industries.
The LED industry is
expected to almost double by 2015, giving Revolution the opportunity to capture
considerable market share. A key reason why the company stands to overtake its
competitors is its expansive dealer network, providing reach to an expansive
group of customers. Because its products are more energy-efficient than many of
its competitors, education is a key competitive advantage.
Several directors
and officers added shares in 2013 with buys and non-open market acquisitions.
Institutions and mutual funds, who own nearly 58 percent of the float, added
23.32 and 39.9 percent, respectively.
Revolution’s
position to capture a significant portion of the growing LED market is a reason
for significant upside in share price. After bouncing off $5.50 in July, shares
are now trading at $3.28.
Support.com
Support.com
(NASDAQ: SPRT) IPO’ed in the middle of 2000 with a
market cap around two billion. Shares subsequently plummeted in 2001 during the
tech bubble collapse. Support.com builds SaaS tools for small business to grow
revenue and increase the customer experience. The company also offers premise
services such as computer installation
and maintenance.
Year over year
revenue is up 28.5 percent, driven primarily by the service business. Despite
the impressive earnings growth, when looking at financial statements, increase
in income stands out. Earnings jumped from 298 thousand to 3.03 million in a
just a year, as the cost of goods sold rose far less revenue. SG&A expenses
also saw far less of a climb. This earnings report shocked Wall Street as it
doubled the estimate.
Institutions
who own more than 80 percent of the float are continuing to add shares this
quarter after consistent additions last quarter.
Continued
demand for software solutions and investor interest in cloud-based companies are catalysts likely to
push Support.com higher during 2014. Shares are currently trading at $3.68.
Vringo
Vringo (NASDAQ: VRNG) is a patent litigation company
currently defending patents related to search.
The company
has several sources of income available for 2014. First, the company won its
case against Google (NASDAQ: GOOG) in November of 2012.
As the legal
process drags on, investors are waiting for Judge Raymond Jackson of the
Eastern District Court of Virginia to award Vringo its payment. They key figure
to watch is not only the lump sum but also a percent of royalties for the
Google’s future North American revenue.
Second, the
company is engaged with Chinese telecommunications company, ZTE, in several European
countries. In December 2013, its Indian division was forced to hand over
additional information and Vringo won an injunction in Germany. These successes
make a global licensing deal likely.
In a 2013
settlement with Microsoft (NASDAQ: MSFT), which is in part dependant the
outcome of the Google trial, Vringo received six patents. Investors are still
uncertain as to what the patents are, but it shows the company has several
growth opportunities after litigation with Google and ZTE.
Shares of Vringo
have been incredibly volatile, often fluctuating around the three dollar level.
Shares are currently trading at $2.93.
Note: Luke Jacobi
is long Vringo.
Read more Benzinga.com small-cap articles: http://www.benzinga.com/news/small-cap
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