By Louis Navellier of InvestorPlace

Four times a year we cross an invisible barrier. You definitely can't see it, but you can certainly feel the powerful change from it. I'm talking about earnings season. We've officially ended the first quarter and earnings announcements are right around the corner.

I expect the S&P 500's operating earnings to be up almost 70% during the first quarter. Many lumbering blue-chip stocks will see modest growth as part of this trend, but small-cap stocks with explosive potential is where the real opportunity is for investors.

Strong earnings are often rewarded with double-digit gains in just a few days after a great report -- so now is the time to buy into the best small-cap stocks before the earnings surge!

Here are my five favorite small-cap earnings giants for the upcoming first-quarter reporting season.

Small Cap Stock No. 1: Internet Gold-Golden Lines ( IGLD)

Internet Gold-Golden Lines is one of Israel's largest Internet service providers with more than 960,000 home subscribers and about 90,000 business customers through its Smile.com subsidiary. The company's other services include virtual private networking and Web hosting. Israeli stocks in general are good bets right now because the country's currency, the shekel, has strengthened in the wake of the Bank of Israel's raising its benchmark interest rate in the past two months to 1.25%.

In the fourth quarter, Internet Gold-Golden Lines' sales rose 3.7% to $86 million compared with $84.36 million during the same quarter a year ago. During the same period, its operating earnings rose 104.7% to $15 million, compared with $7.48 million. For the past three months, analysts have revised their consensus earnings estimates a substantial 35.5% higher, which points to a future earnings surprise when it posts first-quarter numbers.

Small Cap Stock No. 2: Impax Laboratories ( IPXL)

Impax Laboratories is an innovative drugmaker that is constantly seeking a cheaper way to bring specialty generic pharmaceuticals to patients around the world. The company concentrates on controlled-release versions of drugs and niche pharmaceuticals that require difficult-to-obtain raw materials or specialized expertise.

In the fourth quarter, the company sales soared almost fourfold to $176.1 million compared with the same quarter a year earlier. During the same period, Impax Laboratories' earnings rose an incredible 306.7%, to $38.1 million, or 61 cents per share, compared with $9 million, or 15 cents per share. The company's operating earnings were 69 cents per share. The analyst community was expecting operating earning of 14 cents per share on sales of $91.4 million, so Impax Laboratories posted a whopping 392.9% earnings surprise and a stunning 92.7% sales surprise. Analysts have raised their earnings consensus estimates upward 254.3% just in the past month, so I am definitely expecting a great surprise from IPXL when it reports earnings.

Small Cap Stock No. 3: Nova Measuring Instruments ( NVMI)

Nova makes optics to measure microscopic images. The company's NovaScan and NovaTrack optical monitoring systems are integrated into wafer polishers and other semiconductor processing equipment to measure the thickness of semiconductor layers during critical steps of chip manufacturing. The company's customers, such as Applied Materials ( AMAT), Ebara, Lam Research ( LRCX) and Novellus ( NVLS), integrate Nova's tools into their equipment. Nova also sells its standalone systems directly to manufacturers.

In the fourth quarter, the company's sales rose 145% to $15.2 million compared with the same quarter a year earlier. During the same period, Nova's earnings rose to $2.7 million, or 13 cents per share compared with a loss of $1.6 million or eight cents per share. The company recently announced that it has received record quarterly orders, which bodes well for the upcoming earnings report from NVMI.

Small Cap Stock No. 4: Imax ( IMAX)

Imax is a small company with a market cap of less than $1 billion, but its technology is so innovative that this stock is a household name. This pick makes and leases projection and sound systems for more than 350 giant-screen IMAX theaters in more than 40 countries. IMAX's fourth-quarter earnings were spectacular thanks to the blockbuster movie Avatar. But the continued strength of this movie in the theaters as well as new 3D offerings means the ride isn't over yet.

The analyst community has revised its consensus earnings estimates an absolutely astounding 794.5% higher during the past three months. For the first quarter, the analyst community now is expecting IMAX to post 99.3% sales growth and earnings of 30 cents per share compared with a loss of six cents per share in the same quarter a year ago. Add shares of IMAX today to your portfolio if you want to ride the first-quarter earnings surge.

Small Cap Stock No. 5: Cree ( CREE)

Cree is "lighting up Wall Street" with its cutting-edge, light-emitting diodes -- or LEDs. These next-generation lights are more efficient and more versatile, making the old incandescent lights of my youth another piece of outdated technology like the eight-track tape players, VCRs and floppy computer disks. The company sells its products globally, but Asia accounts for more than two-thirds of its overall sales.

In its latest quarter, which ended Dec. 27, Cree's sales rose 35.2% to $199.5 million compared with $147.6 million in the same quarter a year ago. During the same period, its earnings rose 166.7% to $33.8 million, or 32 cents per share, compared with $10.7 million, or 12 cents per share last year.

Looking forward, Cree expects that its current quarterly earnings will come in between 41 cents to 44 cents per share. In the past three months, the analyst community has revised its consensus earnings estimate 34.2% higher. Typically, such strong earnings revisions precede future earnings surprises. Since Cree's operating margins are expanding rapidly, I would not be surprised if the company has another whopping earnings surprise in store.

At the time of publication, Navellier was long IGLD, IPXL, IMAX, CREE and NVMI.

Please note that due to factors including low market capitalization and/or insufficient public float, TheStreet considers NVMI to be a small-cap stock. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.

One of Wall Street's renowned growth investors, Louis Navellier is the editor of four investing newsletters: Emerging Growth (formerly known as MPT Review), Blue Chip Growth, Quantum Growth and Global Growth. His longest-running publication, Emerging Growth, has a track record of beating the market nearly 3 to 1. Navellier is the author of a BusinessWeek bestseller, "The Little Book That Makes You Rich," and the chairman and founder of Navellier & Associates, Inc.

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