Rising Sales Spell Potential

01/05/2007 12:00 am EST


James Oberweis

President, Oberweis Asset Management, Inc.

Wading through reams of financial reports helps Jim Oberweis and his team of analysts zero in on those stocks with all the fundamentals in place for rising appreciation. Here, he finds two with stellar sales and earnings growth...

"Rochester Medical Corporation (ROCM NASDAQ GM) develops, manufactures, and markets silicone (which is PVC - and latex-free) urological and urinary continence care products for urinary dysfunction management and urine drainage management. The company's products use silicone-based and soft liquid-filled catheters which--compared to traditional catheters--are easier to insert and more comfortable for patients. Rochester Medical's individual products include silicone-based external male catheters for managing incontinence and intermittent catheters for urine retention for use by both males and females. Rochester Medical also has a line of acute care products, including an antibacterial Foley catheter that reduces the risk of hospital-acquired urinary tract infections. The company's major customers consist of Hollister, Mentor Medical, and Porges. In Rochester Medical's most recent fourth quarter ended September 30, 2006, the company's sales increased 58%, to $6.8 million, as compared to $4.3 million in the fourth quarter of last year. Rochester also reported earnings per share of $.08 in the fourth quarter 2006 versus $.06 in the same quarter a year ago. Clients of Oberweis Asset Management own approximately 382,000 shares of the equity.

"RRSat Global Communications Network Ltd. (RRST NASDAQ GM) provides global comprehensive content management and distribution services to the rapidly expanding television and radio broadcasting industries. Through the company's proprietary "RRSat Global Network," composed of satellite and terrestrial fiber optic transmission capacity and the public Internet, RRSat Global Communications is able to offer high-quality and flexible global distribution services for content providers. The company's comprehensive content management services include producing and playing out TV content, as well as providing satellite news gathering services (SNG). RRSat Global Communications concurrently provide these services to more than 265 television channels and more than 80 radio channels, covering more than 150 countries around the world. Revenues in the company's most recently reported third quarter increased 47%, to $11.5 million, from $7.9 million in the same year-ago quarter. RRSat Global Communication's earnings in the same period grew 67%, to $0.15, from $0.09 in the same quarter last year when the company was private. The company completed its initial public offering on October 31, 2006, in which RRSat Global Communications priced 3.8 million shares at $12.50 per share. Clients of Oberweis Asset Management, Inc. own approximately 212,000 shares of the equity. These shares may be appropriate for risk-oriented investors."

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