I've never been one to be much interested in jewelry. I don't particularly like wearing any, and I've lost my affinity for fancy watches. Frankly, you can't beat the reliability of a Timex, and you most certainly can't beat the price. One thing I do like, however, is finding a jewelry business on the stock market that's growing significantly.

Every once and a while, if you look long and hard enough, you do come across small-cap stocks with excellent investment potential. Recently, I found another attractive small-cap company that's expanding all over the world, and particularly in China. This company operates in the jewelry business, and, apparently, business is good.

The company is called LJ International Inc. (NASDAQ/JADE) and is boasts all the important characteristics I like to see in a stock market investment opportunity. The company is growing and boasts solid prospects for further growth. The company offers reasonable financial metrics and has a track record of success, both operationally and on the stock market. Company management has a clear business plan for its growth in burgeoning markets like China. And, finally, the stock market continues to have a significant interest in public companies that are expanding in that country.

So, LJ International is pretty close to as perfect a small-cap investment opportunity as you can find in the stock market. Of course, this doesn't mean that the stock will go up, but it increases the odds, I think.

According to the company, its revenues for the first quarter of 2006 grew 39% to $24.16 million, up from revenues of $17.44 million in the first quarter of 2005. First quarter revenues exceeded company management's prior expectations.

Net income for the first quarter of 2006 was a modest $322,000, or $0.02 per diluted share, up from comparable net income of $249,000, or $0.02 per diluted share, in the first quarter of 2005.

The company is incurring a lot of expenses right now setting up its "ENZO" retail store chain in China.

Recently, LJ International increased its long-term outlook, forecasting that its profits would double current levels by the end of fiscal 2008.

All this doesn't mean that the stock will do well as an investment, but it is difficult to find a more attractive small-cap story in the marketplace.