Unlike any of my other screens, this stock screen focuses only on stocks trading under $10/share, and have a market cap of around $1 billion or less (I’ve included a few above that threshold this time around though). As for the variables that I used in the screen, I focused on fundamentals, particularly companies that have a healthy balance sheet with little debt to speak of, with a strong prospect for rapid sales and growth in earnings, as well.
Now be aware, that these kinds of stocks carry huge risks to them. A simple downgrade, news event, or missed earnings target, can derail these small-cap stocks in a heart beat. But if you have some capital that you want to roll the dice with, these stocks will give you a good start in your research.
When I last ran this screen back on 8/30, I mentioned two stocks in particular: Brocade Communications Systems (BRCD) which went from $3.87 up to $4.71 for a nice 22% gain since then in a market that has nothing but killed the bulls. The other one though, American Superconductors (AMSC), I told you to wait to buy until it looked like it could stear clear of the 50-day MA, which it never did, and subsequently dropped like a rock thereafter.
This time around, the stock that stands out most to me is Ariad Pharmaceuticals (ARIA) which has put in a double bottom of late and if it can close above $10.50 fairly soon, then it should see a potential run into the $12’s or even $13’s. It’s definitely a big “IF” with the way the market is behaving but the setup is very promising.
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