Maybe it's the return of bubble mania, but shares of an outsize number of tiny, no-name companies have caught fire lately, and that has some urging caution.

The ones burning up the charts the past month aren't big-cap names, but little-known concerns like Industrial Services of America ( IDSA), up 806% to $40; Vaso Active Pharmaceuticals ( VAPH), up 309% to $36; and Unifab International ( UFAB), up 660% to $10.30.

Trading, meanwhile, in these small-cap Nasdaq stocks has been frenetic, with the demand far outstripping the relatively few shares each company has issued.

On Monday, for instance, 9 million shares of Industrial Services changed hands, even though the Kentucky trash-hauling company has just 900,000 shares available for trading. In other words, traders effectively churned the stock's entire float 10 times in a single day.

The hyperactive trading has been egged on by feverish postings on stock message boards urging investors to buy. Some of the stocks also are being touted in email alerts and newsletters that are favored by daytraders.

The buying doesn't seem based on fundamentals, because most of the companies are either losing money or marginally profitable. In the case of Vaso Active, a Massachusetts company that claims to have a miracle treatment for athlete's foot, there's been more hype than sales to point to.

Rather, what's drawing traders to these no-name moon shoots is the fact that they all have very few shares available for trading, which makes them highly volatile.

"It doesn't take a lot to move these stocks," said Satya Pradhuman, Merrill Lynch's director of small-cap research.

A number of the companies have announced stock splits the past few weeks. That could explain some of the interest, although several market observers discounted it as a major factor.

Some investors no doubt are hoping to catch lightning in a bottle and believe tiny stocks like Vaso Active and Industrial Services can be the next Taser International ( TASR), undoubtedly the most famous low-float screamer of postbubble Nasdaq. But at least fans of the stun-gun manufacturer can point to sharply higher revenue and net income as some justification for their exuberance.

Low floats also make these stocks prone to manipulation by unscrupulous traders looking for large price swings in either direction. In fact, one securities industry source called the surge in daily trading in these no-name stocks "highly suspicious" and possibly indicative of a coordinated strategy.

The Securities and Exchange Commission had no comment on the activity. A spokesman for the Nasdaq Stock Market also had no comment. But officials at several of the companies said Nasdaq officials had made inquiries about the trading activity.

"I've been in touch with Nasdaq every day," said Harry Kletter, the chairman and chief executive of Industrial Services. "I say, 'Is there anything we are supposed to do differently?' And they say, 'No.'"

Professional traders said stocks with low float are fraught with peril because they can easily fall just as fast as they rise. And a small float can make it difficult for an investor needing to sell shares quickly.

On the way down, a low float stock is like a hot potato that no one wants to be left holding.

On Tuesday, the party appeared to be over for at least a few low-float stocks that have posted some huge gains. Shares of Cost-U-Less ( CULS), a discount warehouse store, fell 52 cents, or 8.5%, to $5.60, after nearly doubling in price this year. Shares of Castelle ( CSTL) fell 76 cents, or 12%, to $5.35.

"Playing these low floaters is like a game of musical chairs," said Hal Uy, a trader and contributor to RealMoney.com, the sister site of TheStreet.com. Uy briefly shorted shares of Unifab on Monday. "We all know how it eventually ends."

But, for now, it appears many traders and investors aren't ready to throw in the towel.

Tuesday's highflying stock of the day was Mamma.com ( MAMA), an obscure Internet search engine that saw its shares rise just over $6.30 to $10.36, a 155% one-day jump. Trading was very heavy in Mama's shares, with some 60 million shares changing hands. The stock's float of 6 million shares makes it a veritable behemoth compared with some of the other names surging lately.

But at least Mamma had some news to propel its frenzied trading. The company reported better-than-expected fourth-quarter earnings of $85,000, or 1 cent a share, as it swung to a profit, compared with a year-ago loss.

On Air
Five stocks with eye-popping returns
Stock Price %Gain YTD
Vaso Active $36.61 500
Industrial Services of America 40.40 828
Unifab International 10.25 900
Mamma.com 10.10 212
Cost-U-Less 5.58 86
Source: Yahoo finance.

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