7. Independent Bank (IBCP)
Company Profile: Independent Bank is a commercial bank in Michigan. It provides checking and savings accounts, commercial lending, direct and indirect consumer financing and mortgage lending.Shares of the Michigan company climbed after Independent Bank said its net loss applicable to shareholders shrank to $4.9 million, or 65 cents a share, in the fourth quarter, compared to a year-earlier loss of $48.2 million, or $20.49 a share. On Feb. 16, Independent Bank announced its senior management succession plan, although shares pulled back shortly after when the company announced the unregistered sale of 253,000 shares of common stock to Dutchess Opportunity Fund II as part of an investment agreement established in July 2010. Current Share Price: $3.23 (March 29) First Quarter Total Return: 148% Analyst Ratings: Stifel Nicolaus is the only research firm currently following Independent Bank, recommending that investors hold on to shares. TheStreet Ratings has a "sell" rating on Independent Bank, noting that despite the recent stock rally, shares are down sharply in the past two years and underperform the S&P 500. "Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter," the March 20 research note reads.
6. Star Buffet (STRZ) Company Profile: Star Buffet is a multi-concept restaurant holding company, which operates throughout the southeastern and western U.S. Shares of Star Buffet came under pressure in late 2010 as the company wasn't in compliance with one financial covenant under its credit facility with Wells Fargo Bank. However, the bank hasn't elected to terminate the credit facility and accelerate the due date of outstanding obligations. As of Nov. 1, Star Buffet owed nearly $2.5 million on its revolving credit line and almost $3.8 million under a term loan. With the immediate threat of a bankruptcy waning, Star Buffet shares rocketed higher in January. Still, the company faced three separate notices from the Nasdaq that the stock was subject to delisting. Star Buffet isn't in compliance with the Nasdaq's listing qualifications due to the delinquency in filing its third-quarter financial statements. Current Share Price: $1.65 (March 29) First Quarter Total Return: 162% Analyst Ratings: No research firm has coverage of Star Buffet. However, TheStreet Ratings has a "sell" recommendation on Star Buffet, citing "feeble growth in its earnings per share, deteriorating net income, generally weak debt management, disappointing return on equity and weak operating cash flow."
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