This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

3 Breakout Stocks Shine

Stocks in this article: OVTI CROX PRFT

Editor's note: As part of our partnership with PBS's Nightly Business Report, TheStreet's Bryan Ashenberg joined NBR to highlight mid-cap stocks with breakout potential. (Watch video and read transcript here.)

With earnings season nearing an end, we are taking this opportunity to highlight three of our favorite Breakout Stocks model portfolio holdings. We will examine how they are positioned to grow within their respective industry, based on secular growth drivers and company-specific levers and initiatives that should allow the stocks to become solid investments.

First up is OmniVision Technologies (OVTI), which is a leading designer and marketer of high-performance, semiconductor image sensors for mass-market consumer and commercial applications. The company is benefiting from the huge trend of incorporating image sensors (and, increasingly, two image sensors) in wireless mobile devices.

In its recently reported third quarter, OmniVision generated 72% of its sales from handsets, and we expect the company to continue seeing robust growth based on to the explosion in demand for smartphones. The combination of social media with mobile devices is creating increased demand for higher-quality image sensors, which, ultimately, should bring greater profits to OmniVision's bottom line. This stock is an excellent way to capitalize on the proliferation of image-capable, digital devices.

Word on the Street

Next, Crocs (CROX) is a footwear designer, manufacturer, marketer and retailer based on its proprietary closed-cell resin, "Croslite," which allows the company to produce lightweight, nonmarking, slip and odor resistant footwear. While carefully managing its expenses, Crocs is aggressively expanding its selection, its geographic footprint and its direct-to-consumer reach.

This isn't your father's clogs company anymore, as the company's core products represented just 18% of fourth-quarter sales, while new products (those introduced in 2010) represented 31% of sales. Crocs has over 250 styles of shoes, which has allowed the company to enjoy increasing its average selling price. The company posted better-than-expected fourth-quarter results a few weeks ago, and we believe the company's fundamentals warrant a higher stock price.

Last, Perficient (PRFT) is an information technology (IT) consulting firm that serves Global 2000 and enterprise customers throughout the U.S. As macroeconomic conditions improve, the company will likely benefit from the release of the pent-up demand for discretionary IT purchases. Perficient is demonstrating healthy margin growth, and we expect positive operating leverage to allow the company to grow its earnings faster than its revenue growth in the next few years.

Management recently commented that the company's bookings were very strong and that this momentum had carried over into 2011. In fact, management recently reported that during the past three months (ending February), 25% of the projects the company booked were from new customers, which is an excellent harbinger of future growth. We find the stock to be an excellent, small-cap play on the re-emergence of IT consulting.



Readers Also Like:


In keeping with TSC's editorial policy, Bryan Ashenberg doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. He appreciates your feedback; click here to send him an email.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs