Another one of my favorite companies, Huron Consulting (NASDAQ/HURN) just hit over $68 per share. Not bad for a consulting firm that was recently trading for $36 per share. The company serves to illustrate that it is just as easy to make a great return on your money from a larger-cap company as it is with a small- or micro-cap company.
The key is always the same — owning the right stocks. Nothing else matters.
Another company we’ve talked about in this column, Omniture (NASDAQ/OMTR), looks to be resuming its upward trend. The stock recently took a well-deserved rest, and this always causes concern for investors. When a winning position takes a rest, everyone thinks they should cash out. All you can do is consider the sentiment in the broader market, reevaluate the fundamentals of the company, and act accordingly. As it turns out in this case, the rest set the platform for the stock’s next upward move.
I also still really like VCA Antech (NASDAQ/WOOF) and Luxottica Group (NYSE/LUX). Both of these companies are proven wealth creators for stockholders.
Companhia Vale do Rio Doce (NYSE/RIO) is already ticking higher from when I first wrote about it earlier this month. This is a large-cap company with an excellent track record of outstanding wealth creation. Even though this stock has already done well, all material information indicates that it will continue to do very well over the coming years.
One high-risk micro-cap that’s got my attention these days is Zanett Inc. (NASDAQ/ZANE). This company sells customized information technology (IT) solutions to corporations and government agencies involved in homeland security. The company’s Government Solutions division specializes in providing advanced software and satellite engineering services dealing with classified “geospatial data exploitation.” The company’s Commercial Solutions division provides management consulting services and custom business solutions, using Oracle, JD Edwards, PeopleSoft, and Seibel technologies. The company is an “Oracle Partner” and member of the “Oracle Partner Network.”
Zanett currently employs over 210 people nationwide and is headquartered in New York City, with offices in Boston, Cincinnati, Detroit, Indianapolis, Jacksonville, Philippines, and Denver. The company was founded in 2000.
In its third quarter ended September 30, 2006, the company generated revenues of $11.2 million, representing growth of 22% over revenues of $9.2 million generated in the comparable quarter. The company incurred a net loss of $310,000 in the latest quarter with positive EBITDA.
This stock is way down from its high. But, the company expects to achieve profitability in the next quarter or so. Very often, when a turnaround investment opportunity is about to achieve profitability, it is a great time to consider a position in the stock.
There’s no question that investing in turnaround stocks is a very high-risk investment strategy. Then again, all equities are high- risk. If you’ve got a risk-capital portfolio of stocks, I think it makes sense to have a least one turnaround opportunity in the basket.