How to profit from the US fiscal crisis? The small-cap US Global Investors is in the midst of an impressive comeback, writes Mark Skousen in Turnaround Trader .

Commodities are in a roaring bull market, which is likely to continue. One firm that is benefiting tremendously from this is US Global Investors (GROW), the boutique investment firm based in San Antonio.

US Global has a dozen mutual funds specializing in natural resources and emerging markets. I've known CEO Frank Holmes for years—he's one of the sharpest CEOs in the country, and is constantly traveling and finding out what is going on in the world.

He also manages the Holmes Growth Fund (ACBGX), which is up more than 9% year-to-date, and is beating the market.

His firm, US Global, is experiencing its own turnaround; the company lost 70% of its value from its high of $30 a share back in 2007. It's now recovering and near $10 a share, but could go much higher.

US Global's metrics are strong. Revenues are up 32%, to $38 million; earnings have jumped 55% in the past year, to $6 million. It enjoyed a 15.7% profit margin and a return on equity of 16%. It also has no debt.

The investment is a bit pricey, selling at 23 times current earnings. But if earnings advance, as expected, the stock is actually cheap. US Global pays a dividend of 2 cents a month, for a 2.4% annualized yield.

In fact, Frank Holmes and other insiders bought $1 million worth of company stock last month, showing that their confidence in the company's future is strong. (Holmes is also bullish on oil and gold, predicting that prices will double in the next two or three years!)

Let's join him and other company insiders by buying GROW. Set a protective stop of $8 a share here.

For those willing to take greater risks, consider buying the September $12.50 calls at 30 cents or less. [Those calls fetched 77 cents Tuesday—Editor.]

A final warning: US Global is a small-cap stock, with a market capitalization of only $142 million. Do not chase this stock or its call options. If the price moves up too much, hold off. (Another US Global fund, US Global Investors Eastern European Fund (EUROX), currently is a recommended position in my Forecasts & Strategies investment newsletter.)

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