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 Small-Caps With Big Futures

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK (Zenpenny) -- Over the past few months I have mentioned a number of names that I thought would present opportunity for profit to investors over an intermediate to long-term time horizon. What I've rarely done is to pass on opportunities in my favorite area for investment: micro- and small-cap stocks. I go one step further in my research of these names and look for companies that are undergoing some type of distressed situation that forces old habits to disappear, being replaced by new ways of doing things that tends to bring out the value in a much more timely manner.

Investors have a tendency to get caught in value traps more often than not. You will look at a company that seems reasonably priced based on any number of metrics and think to yourself that a 100% gain will be a simple goal over the next 12 to 24 months. What ends up happening is the stock is passed over multiple generations as your great grandchildren await the day when the promise of value becomes a reality. Sure, I am exaggerating a bit. But you get my point.

What investors overlook more often than not are catalysts. Every investment needs a catalyst to realize its value. It doesn't matter if it seems like the cheapest stock in the history of our universe, if a catalyst doesn't exist to extract the juice from the lemon, then it will sit around doing absolutely nothing.

I have come up with three names that not only provide value, but have the catalysts necessary to see that value become a reality. The catalysts come in the form of new economic realities, a restructured balance sheet/management team or a macro trend that will favor the company going forward.

MAMS

MAMS Software Group (MAMS) is a U.K.-based company that provides software to automotive parts distributors, service companies and manufacturers. They have a dominant position in their marketplace with a controlling share of the current market. Among their current customers in the U.S. you have: Autozone, NAPA Auto Parts, Monro Muffler Brake, Fountain Tire and US Autoforce.

1 of 4

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!
DOW 17,079.57 -42.44 -0.25%
S&P 500 1,996.74 -3.38 -0.17%
NASDAQ 4,557.6950 -11.9260 -0.26%

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