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Four Stocks To Own Now
05/06/2008 12:00 am EST
James Oberweis, editor of the Oberweis Report, says this is a great time to buy small growth stocks and he picks four potential winners.
Market bottoms are like giving birth. The exact moment is hard to predict, but it is always painful. And once it is over, it sure feels better.
March 2008 will likely prove to be that bottom. Stocks are still very cheap and for certain issues, our earnings visibility is quite high, particularly for companies that have already reported earnings for the March quarter.
Here are four stocks that reported solid growth in the March quarter and should definitely be part of your investment portfolio:
Illumina (Nasdaq: ILMN) hit a new high this month after reporting stellar earnings. Revenues were up 69% and earnings came in at [21 cents a share,] up 75% year over year. Illumina makes expensive machines called gene sequencers, [which] are sold to research labs and clinical trial organizations to test the efficacy of different drugs on people with slight genetic differences.
Once studies are complete, a doctor with your genetic map can make better prescription choices when selecting among multiple therapies. Illumina competes against Affymetrix (Nasdaq: AFFX), [whose] revenues fell short of analysts' expectations in the first Quarter [while] Illumina beat expectations [over] that same time period. We suspect Illumina is just eating Affy's lunch. (It closed just below $81 Monday, near its 52-week high-Editor.)
Anadigics (Nasdaq: ANAD) is one of many battered technology names beginning to rise from the dead. After dropping from a 52-week high of $19 in October 2007 to $6 in February, shares reflected expectations of disaster. But when Anadigics reported, revenues were up 50% over the same quarter last year and well ahead of expectations. Pro-forma earnings of 15 cents a share were 50% more than analysts expected. Shares surged 33% on the day earnings were released. At [just above] $11, shares are still cheap and should be bought.
Beijing-based VisionChina Media (Nasdaq: VISN) operates an advertising network of over 49,000 digital TV displays on buses, subway trains, and subway platforms in 15 cities in China. Revenues for VisionChina in 1Q grew 304% to $14 million. Earnings of [eight cents a] share beat analysts' expectations. Shares remain undervalued [below $17 a share-Editor.)
Chinese internet search engine Baidu.com (Nasdaq: BIDU) reported yet another great quarter, with revenue growth of 125% and earnings growth of 93%. Baidu remains the market leader in Chinese internet search, and China ranks among the fastest growing markets in the world. By all accounts, Baidu's shares are pricey [below $373 Monday-Editor.]
But Google looked that way in 2004 as well. Google's operating leverage as the dominant player translated to margins that made shares a super deal even at high nominal P/Es. Baidu is in a similar position and deserves a place in your portfolio.
Watch this quarter's earnings reports for companies reporting solid growth; now is the time to buy them at discount prices.Subscribe to the Oberweis Report here.
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