5 Stocks for Your Watch List

 | Feb 01, 2014 | 12:00 PM EST  | Comments
  • Comment
  • Print Print
  • Print
Stock quotes in this article:

mont

,

smci

,

nvdq

,

refr

,

fonr

,

FB

,

tsla

,

scty

,

qihu

When the market corrects itself the way it has over the past couple of weeks, it is an ideal time to build a watch list. Big-caps such as Facebook (FB), Tesla (TSLA), Netflix (NFLX), Google (GOOG), SolarCity (SCTY) and Qihoo 360 (QIHU) are some of the obvious stocks to watch, but I like to dig into the thinly traded small-caps that have the potential to explode to the upside as they become better known in an improving market.

Here are five names on my radar.

Montage Technology Group (MONT) is a fabless provider of semiconductors used in home entertainment and cloud computing. Earlier this month it announced better-than-expected earnings on sales of its set-top boxes in China and other emerging markets. Friday it priced a secondary offering at $21, which should serve as support. Intel (INTC) owns a large stake in the company.

Super Micro Computer (SMCI) provides high-performance servers, storage and rack solutions. Half of its business is in China. The shares moved sharply higher Jan. 22 after posting better-than-expected sales and earnings. Estimates have continued to come up and the company is now expecting net-income growth of 64% in 2014, but it trades with a trailing price-to-earnings ratio of just 20. With this cheap valuation and strong chart, we are looking for momentum to build in a better market.

Novadaq Technologies (NVDQ) is a medical-device maker with an innovative product used to perform X-rays during surgery. It also has a product called Firefly that is used in conjunction with robotic surgery for high-definition color imaging. This is primarily a story stock but the company is seeing revenue grow at a 50% pace and should continue to attract attention.

Research Frontiers (REFR) designs suspended particle device, or SPD-Smart, technology that controls the amount of light, glare or heat that passes through glass or plastic. The company recently announced that the new Mercedes Benz 600 employs its technology to turn the roof transparent with the touch of a button. The company has been gaining attention and has an attractive chart.

Fonar Corp. (FONR) develops MRI scanners that allow patients to stay in an upright position. The company had a huge quarter and gapped up sharply last November. It continued to run due to its exceptionally low valuation but has recently pulled back and is now trying to find support. The company has consistently grown earnings and saw its revenue increase by 77% in the September 2013 quarter. We are looking to move up as traders anticipate the next report. There is no analyst coverage.

These stocks are all thinly traded which means there is high risk, as well as high reward. Positions must be very carefully managed.

All charts by TCNet

Columnist Conversations

CHECK IT OUT HERE Lot's of great out and underperformer picks, as well as M&A ideas that you don't always ...
The major market indices continue to move within the parameters of the Fibonacci retracement levels measured o...
Since we cleared a key decision on the way up, I want to watch this pullback for an entry if it fires off a bu...
Conclusion DDD is down today on new that the firm has cut revenue forecast due to production issues. The issue...

BEST IDEAS

REAL MONEY'S BEST IDEAS

Columnist Tweets

BROKERAGE PARTNERS

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.


TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.