Coolcat's Pair

01/20/2006 12:00 am EST

Focus:

Kevin Kennedy

Publisher, Coolcat Explosive Small Cap Growth Stock Report

"It doesn’t pay to fight with Mr. Market," says Kevin Kennedy who focuses strong price momentum, strong technicals, and a strong buy and sell discipline. For speculators, he looks to Peerless, a play on digital documents. For conservative investors, he picks Prudential.

"My speculative pick for 2006 is Peerless Systems (PRLS NASDAQ), a provider of advanced imaging and networking technologies and components to the digital document market. It is pursuing a strategy that would combine Peerless' new imaging technologies with third-party co-processors onto a single chip. This would enable the penetration of high-volume, mid- and lower-end printing markets. Peerless has been aggressively pursuing two separate design-win opportunities, and  signed three license agreements with a combined value of $4.1 million in the third quarter.

"Third-quarter revenue was $9.6 million, up 93% from last year's third quarter. Engineering services and maintenance revenue was $3.2 million versus just $0.4 million reported in last year's comparable quarter, with the sharp increase resulting primarily from $2.0 million received for quarterly development services performed for Kyocera-Mita. Third-quarter net was $1.0 million, or $0.06 per share, up from a loss of $1.3 million, or $0.08 a share, in the third quarter last year.

"My more conservative pick for the coming year is Prudential Financial (PRU NYSE), which is made up of a group of financial services companies. With more than $500 billion in total assets currently under management, Prudential Financial serves individual and institutional customers worldwide and includes The Prudential Insurance Company of America, which is one of the largest life insurance companies in the United States.

"Together, these companies offer a variety of products and services, including life insurance, mutual funds, annuities, pension and retirement related services and administration, asset management, securities brokerage, banking and trust services, real estate brokerage franchises and relocation services. The company updated its guidance in early December and said it expects full-year earnings per share in the range of $4.85 to $4.95 for 2005 and in the range of $5.40 to $5.60 for 2006."

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