Top Five Stock Ideas of the Week

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Stocks Under $10: Frank Curzio and the Stocks Under $10 team started a position in Euroseas(ESEA). Curzio said, "After you read this Alert, we will buy 500 shares of Euroseas, a Greece-based company that owns and operates a fleet of five dry bulk vessels, 10 container ships and one multipurpose vessel. We believe the stock has a favorable risk/reward profile for investors over the next 12 to 18 months. Shares were recently trading at $3.75.

"Shipping stocks have been hammered over the past 12 months, mostly due to a major slowdown in economic growth across the world. The Baltic Dry Index (BDI), which provides the daily price of moving raw materials (such as coal, crude oil, steel and building supplies) by sea, has collapsed from a high of 11,793 in May 2008 to below 1500 currently. The past few weeks in particular have seen a sharp downturn in the BDI. Conditions in the shipping sector remain weak, and some stocks in the industry are in danger of breaching debt covenants.

"However, Euroseas is not in this camp. Among the positives for this name are its experienced management team -- which was well ahead of the curve in terms of cost-cutting -- and a very strong balance sheet that will help it weather further downturns. In addition, Euroseas is one of the few dry-bulk names to trade at a discount to net asset value. When looking at a particular stock in an industry that has been badly beaten up, it's important to measure the risk against the reward. Euroseas has one of the lowest cost structures among public shippers and one of the lowest leverage ratios, and management is rather conservative in its assumption that there will be little industry growth in 2010." (Frank Curzio, Stocks Under $10, April 9, 2009)

Curzio has had some other great picks recently; to check them out, please click here.

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