Donald Rowe, editor of The Wall Street Digest , notes that he rarely ever recommends a stock trading below $10 a share. It is even rarer that he picks an issue trading around $1. Nevertheless, he says, "I have discovered a low-priced stock that has a great deal of potential. It has the characteristics that could make it your best performing stock of 2003. Although this selection is speculative, I feel the upside outweighs the risk." Here's his low-priced pick.

"Storage Alliance (SGAL NASDAQ) is in what I believe to be one of the best sectors of the market for 2003- data storage. The firm designs, installs, and services content storage and management solutions for specific industry niches. Its strength is in data storage servicing, which parallels the trends of industries to divest non-core functions, including increasingly expensive IT infrastructure needs. And because of the nature of this business, the company enjoys recurring income from its clients.

"The firm's targeted industry is oil and gas exploration and production (E&P). Due to the growing need for less reliance on foreign oil and gas sources, the company's clients are increasingly in need of its services. The E&P market is experiencing 17.5% annual growth in the US and Canada alone. IT spending in the industry has increased 43% since 1999.

"One of the company's critical benefits is the reduction of costs and timelines. Storage Alliance has developed an efficient product that cuts the time it takes a geophysicist to research critical data down from three to ten weeks to just three to four hours. What's more, they have reduced upstream petroleum data collection and analysis costs from an average of $95,500 per workstation to $5,200, a 95% reduction in hard costs for E&P firms.

"This year, Storage Alliance is projecting $6 million in sales. With other companies in this sector trading at about five times sales, Storage is trading at a 77% discount to the industry average. I project sales of $20 million in 2004. If you invest in this stock, I suggest you plan to hold for at least one year." 

(We note that the issue has been very volatile since Rowe's recommendation, and caution readers against chasing the stock.)