01/13/2014 5:00 am EST
For his favorite speculative idea for the coming year, Benj Gallander, editor of Contra the Heard Investment Letter, looks to a high-risk, low-priced stock. As an aside, we caution that this idea is only suitable for those fully-aware of the inherent risks of a stock trading below $1 per share.
The company virtually doubled in size three years ago when this communications solutions provider acquired Sinclair Technologies. Sinclair's products include radio frequency antennas, portfolio satellite systems, and microwave components.
Revenues for Norsat are currently in the $35 million (CDN) range. Management has been running a tight ship with a sharp eye on expenses.
This has allowed the company to remain profitable, even with government spending cutbacks, which have negatively impacted sales.
The debt load, assumed with the Sinclair takeover, has been reduced on schedule, leaving only a nominal amount. The share price approximates the company's book value. Worth noting is that insiders have been steadily accumulating the shares.
During the dot.com bubble, this stock traded above $30. Though a number like that is pie-in-the-sky, a quadruple is certainly not out of the question.