Stocks and Dollars

I love small stocks, the smaller the better; small-caps, micro-caps and especially mini-micros, a term I’m using for stocks priced at single-digit levels. This doesn’t mean I’ll buy based solely on a single-digit stock price. Due diligence is always necessary and I’ll discuss that below. But I prefer to hunt and analyze in the lower echelons of the market’s size hierarchy, away from the big well-known issues whose prices are heavily influenced by name recognition, popularity, etc. The lower you go, the more likely it is that you will be able to succeed with garden-variety fundamental analysis, the things you read about in web tutorials, how-to books, seminars, etc.

Here are the two key investment drivers that benefit min-micros.

1. Very Small Market Capitalizations: There are times when S&P 500 stocks or a broader group of big-caps will lead the market, but over longer time periods, small-caps tend to outperform. This

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Variant View Research submits:

On 4/6/2011, Advanced Battery Technologies (ABAT) issued a press release responding to our research report titled “Advanced Battery Technologies (ABAT): The Most Egregious Chinese RTO.”

We present, side-by-side, excerpts from ABAT’s response and statements from their official filings. ABAT’s response contains numerous false and misleading statements which directly contradict its filings. We have provided links to these filings to make it convenient for the reader to verify our claims.

In our report, we noted that Chairman Fu now owns the company’s key subsidiary, which ABAT had previously claimed ownership of.

We wrote:

If the filings are accurate, the Chairman transferred ownership of the company’s sole operating subsidiary to himself without explanation or compensation. If the filings are inaccurate, then the company is guilty of misrepresenting itself as previously owning 100% of HLJ ZQPT.

Excerpt from ABAT response on 4/6/2011:

[HLJ ZQPT] has been owned by 16 investors, including Chairman Fu,

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The Energy Report submits:

Planet Earth is in the midst of a food bull market. Wellington West Capital Markets Managing Director Robert Winslow follows small-cap agricultural stocks that can give investors both diversification and leverage to achieve double-digit percentage growth. In this exclusive interview with The Energy Report, Robert shares some small-cap names where investors can plant capital and reap vigorous rewards.

The Energy Report: We know that a growing population is a long-term driver of fertilizer, but what has driven the potash market so dramatically higher over the last six months?

Robert Winslow: Well, it’s interesting and it’s pretty simple. The key driver for all these Ag equities is rising grain prices—whether it’s potash, phosphate, agricultural equipment manufacturers or any companies in the Ag space. These equities generally benefit when grain prices are rising.

It’s a function of farm income—the grain complex drives farm income, which drives farm expenditures. We called the bottom

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Ted Stamas submits:

To call Acme Packet’s (APKT) 25 fold rise the last two years parabolic would be an understatement. It’s been more like a vertical lift-off starting at $3/share in early 2009 and hitting $77 on 3/4/11. The stock ricocheted off the top of its all time high last month, and you could have scooped it up for $67 on April 1st, but it has since bounced back to the $75 range. The digerati like this company and it comes as advertised. Its signature technology is the science of our time.

Back in the late 1990s George Gilder used to evangelize about the telecosm (infinite bandwidth) and how increased use of broadband would engulf us and dictate consumer and business behavior. Well that time has come. Acme Packet is serving notice that it is an elite class of technology company and is building a global franchise. The company seemed to be locked

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Nicholas Southwick Levis submits:

Microcap Value investing is not getting very much attention these days. Most investors are choosing large cap managers, large cap stocks, or ETF’s that track small and mid cap companies rather than uncovering value in the middle markets. The general avoidance of small cap value stocks has created an environment that has left many stocks below book value stocks trading at incredibly cheap valuations. (While completely lacking in net-net stocks, where net current assets are higher than the company’s market cap, meaning that if you liquidate the assets shareholders would make money.)

Investors with a penchant for cheap stocks should consider the following ten microcap bargains, even though they are not traditional “Cigar Butt” type investments (companies trading below net current assets minus total liabilities) which in the past have driven strong investment gains for patient and alert value investors. When investing in cheap small caps, it pays to be

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Nicholas Southwick Levis submits:

Microcap Value investing is not getting very much attention these days. Most investors are choosing large cap managers, large cap stocks, or ETF’s that track small and mid cap companies rather than uncovering value in the middle markets. The general avoidance of small cap value stocks has created an environment that has left many stocks below book value stocks trading at incredibly cheap valuations. (While completely lacking in net-net stocks, where net current assets are higher than the company’s market cap, meaning that if you liquidate the assets shareholders would make money.)

Investors with a penchant for cheap stocks should consider the following ten microcap bargains, even though they are not traditional “Cigar Butt” type investments (companies trading below net current assets minus total liabilities) which in the past have driven strong investment gains for patient and alert value investors. When investing in cheap small caps, it pays to be

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Ian Wyatt submits:

Most publicly traded utilities have the distinct advantage of paying investors a dividend. This dividend significantly enhances the equities’ total return over time.

As I’ve stressed before, every portfolio should include dividend-paying stocks as part of a diversification strategy. So when I came across a diversified energy company that was paying a 4.4 percent yield to investors, I had to write about it.

This regulated power business is an oil and gas producer, but it also dabbles in coal and some energy marketing too.

The company is Black Hills Corporation (NYSE: BKH) and it just finished the first quarter with a comfortable 13 percent increase in share price, as you can see in this chart.

Black Hills, which now has a market cap of $1.3 billion, grew out of the partnership that first brought electric lights to the legendary gold rush town of Deadwood, South Dakota, in 1879. The company

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Ian Wyatt submits:

The small-cap Russell raced higher last month to end what was the best first quarter in years. During that time, several stocks have hit 52-week highs, particularly over the past few weeks. Here are the top three small cap stocks that benefitted from the rise.

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Epicor Software Corp. (EPIC)

Epicor hit another 52-week high on April 4. Shares of the application software designer/developer are $1.30, or 13.7% higher on the session. Volume is significantly higher at 9.1 million shares traded as of 1:00 p.m. EST. Average volume has been 273,800 share over the past 30 days.

The company stated that it would be acquired by private equity firm Apax Partners for $12.50 a share in an all-cash deal. The transaction values the company at $976 million. The acquisition is expected close by the end of the second calendar quarter of this year.

Westport Innovations (WPRT)

Like Epicor,

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