Universal Electronics on Fast-Forward

Editor's note: This Breakout Stocks alert was originally sent to subscribers May 29 at 12:51 p.m. EDT. It's being republished as a bonus for TheStreet.com and RealMoney.com readers.

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One way to get the most out of your investment portfolio is to focus on up-and-coming names that are often ignored by most investors.

To that end, we'd like to give readers an advance look at the most compelling names in our universe of small- and mid-cap stocks -- which we define as those trading above $15 a share with market caps in the $250 million to $6 billion range. We'll start today with Universal Electronics(UEIC Quote), a small-cap, which was recently trading at $32.30.

Universal Electronics' main business is producing and selling advanced remote controls. The company breaks out two business lines, business and consumer. The former encompasses sales to subscription broadcast companies as well as consumer-electronics manufacturers, and accounted for 76% of sales in the first quarter of 2007.

Customers in this category include Comcast(CMCSA Quote), Motorola(MOT Quote) and Cisco Systems'(CSCO Quote) Scientific-Atlanta unit, Sony(SNE Quote) and Panasonic. Growth in this business is being driven by consumers upgrading to more advanced levels of television service, including high-definition TV, video-on-demand and digital video recorders.

Universal's smaller consumer line consolidates the company's results from sales to retailers, private-label sales and custom home-theater installers. Top customers here include Best Buy(BBY Quote), Wal-Mart(WMT Quote) and Costco(COST Quote).

Growth in this area is being driven by the increasing complexity of consumers' living rooms as well as the general boom in home-theater use, which has created a pressing need for more sophisticated, highly programmable remote controls that can replace the pile of remotes sitting on people's coffee tables.