10 Best-Performing Penny Stocks of 2010

BOSTON (TheStreet) -- For a handful of penny-stock pickers -- those willing to buy securities with the greatest risk -- returns have been akin to winning the lottery. TheStreet found the top 10 penny-stock performers of 2010, and we offer a look at what may be in store for 2011.

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10. WHX Corp. ( WXCO)

Company Profile: WHX is a diversified industrial company with six businesses, including precious metals and tubing.

Closing Price: $11.95 (Dec. 17)

Total Return (YTD): 398%

Developments in 2010: WHX shares began the year at $2.40. The stock doubled in April after WHX said it expected to report sales from continuing operations of approximately $146 million and a net loss from continuing operations of between $2.7 to $1.9 million in the first quarter. The stock jumped again in August after WHX reported net income of $6.3 million on net sales of $181 million for the second quarter. In October, WHX announced a debt refinancing.

Analyst Consensus: WHX Corp. has no analyst coverage.

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9. VirnetX Holding ( VHC)

Company Profile: VirnetX is an Internet security software and technology company. VirnetX is focused on commercializing a patent portfolio for providing solutions for secure real-time communications such as instant messaging and voice over internet protocol.

Closing Price: $13.33 (Dec. 17)

Total Return (YTD): 396%

Developments in 2010: VirnetX shares started the year at $2.94. The stock took off in March after a jury awarded VirnetX a $105 million judgment against Microsoft ( MSFT) for infringing two VirnetX patents. The stock was included in the Russell 3000 Index and Russell Global Index when Russell Investments reconstituted the indices in June. Also in June, VirnetX announced a special one-time dividend payment of 50 cents per share. In August, VirnetX filed a new patent infringement lawsuit, naming Apple ( AAPL), Cisco ( CSCO), NEC and Aastra in the complaint.

Analyst Consensus: The one analyst covering VirnetX has a "buy" rating on the stock.

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8. Kingold Jewelry ( KGJI)

Company Profile: Kingold Jewelry designs and sells gold jewelry in China via a variable interest entity relationship with Wuhan Kingold Jewelry Company Ltd.

Closing Price: $6.50 (Dec. 17)

Total Return (YTD): 434%

Developments in 2010: Created through a reverse merger in September 2009, this thinly traded stock began the year at $1.18 but rallied above $10 in August after the stock was added to the Nasdaq.

Analyst Consensus: No analyst has coverage of Kingold Jewelry.

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7. Radcom ( RDCM)

Company Profile: Radcom makes test and service equipment.

Closing Price: $9.69 (Dec. 17)

Total Return (YTD): 473%

Developments in 2010: Radcom shares finished 2009 at $1.69. In April, Radcom swung to a first-quarter profit, sending shares higher to nearly $5. The stock surged above $10 in September after Radcom said it repaid the remainder of its outstanding debt to the Plenus Venture Lending Fund, seven months in advance of its scheduled maturity date. The original credit facility was for $2.5 million.

Analyst Consensus: There is no analyst coverage of Radcom.

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6. IDT Corp. ( IDT)

Company Profile: IDT provides telecommunications services to consumers and businesses, wholesale carrier services and local, long distance and wireless phone services.

Closing Price: $26.77 (Dec. 17)

Total Return (YTD): 479%

Developments in 2010: IDT shares finished out 2009 at $4.75 and rallied in 2010 on a myriad of positive news releases. In April, the company said it regained listing compliance with the New York Stock Exchange after it "significantly improved its operational and bottom-line performance during the eighteen month business plan period provided by the NYSE." IDT also improved its liquidity and overall financial condition, which pushed the stock higher to $10. In November, IDT announced a spin-off of its Genie Energy division while also authorizing a dividend of 22 cents a share. Shares popped to a 52-week high of $30.12 in December after reporting fiscal first-quarter financial results.

Analyst Consensus: There are no analysts covering IDT shares.

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5. LGL Group ( LGL)

Company Profile: LGL Group makes customized electronic components used primarily to control the frequency or timing of electronic signals in communications systems.

Closing Price: $19.90 (Dec. 17)

Total Return (YTD): 505%

Developments in 2010: The stock finished 2009 at $3.29, around where it traded for most of the year after falling more than 75% in 2008. In March, LGL Group posted a fourth-quarter profit of 15 cents a share, swinging from a year-ago loss of 5 cents a share. For an encore, LGL said in May that it had a first-quarter profit of 47 cents a share, swinging from a year-ago loss of 46 cents a share. In October, the stock climbed as high as $34.71 after LGL announced that it has repaid the remaining principal and interest due under its loan agreement with RBC Centura Bank, approximately $2.3 million, and terminated its loan agreement effective Sept. 30.

Analyst Consensus: One analyst covers LGL Group, recommending the stock to investors as a "buy."

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4. China Shen Zhou Mining & Resources ( SHZ)

Company Profile: China Shen Zhou Mining & Resources mines for fluorite and nonferrous metals such as zinc, lead and copper in China.

Closing Price: $4.42 (Dec. 17)

Total Return (YTD): 522%

Developments in 2010: Shares of China Shen Zhou started the year at 71 cents. The stock doubled in October as rare-earth plays spiked higher. China Shen Zhou shares jumped again in December after the company announced 2011 guidance, saying it expects a 164% increase in revenue to $38 million.

Analyst Consensus: There are no analysts covering China Shen Zhou Mining & Resources.

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3. Wabash National ( WNC)

Company Profile: Wabash National is a truck trailers and transportation-related equipment maker based in Lafayette, Ind. Shares spent most of 2009 in penny-stock land after the company suspended dividend payments and sought a capital infusion, finishing the year at $1.89.

Closing Price: $12.34(Dec. 17)

Total Return (YTD): 553%

Developments in 2010: Wabash National secured a three-year purchase agreement with Swift Transportation in March, and a month later the company announced a three-year purchase agreement with Prime Inc. In May, Wabash National reported a first-quarter net loss of $139.1 million, or $4.64 a share, on net sales of $78 million. That compared to a year-ago loss of 94 cents a share on net sales of $78 million. Shares pulled back following the earnings release and fell further after Wabash National priced an offering of 11.75 million shares of common stock at $6.50 per share, with net proceeds used to repay debt. In December, Wabash shares hit a 52-week high of $12.76 in the absence of any company-specific news.

Analyst Consensus: Five analysts currently cover Wabash and all five have a "buy" rating on the stock.

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2. Cost Plus ( CPWM)

Company Profile: Cost Plus is a retailer of casual home furnishings and entertainment products in the U.S.

Closing Price: $11.05 (Dec. 17)

Total Return (YTD): 983%

Developments in 2010: The stock traded above $40 at the beginning of 2004 and were on a steady decline, falling below $1 for much of 2009. Cost Plus shares finished last year at $1.02. In March, Cost Plus swung to a fourth-quarter profit of 95 cents a share from a loss of 83 cents a share in the year-ago quarter. A month later, the company ended its shareholder rights plan earlier than planned. Cost Plus said in May that it had a first-quarter loss of 47 cents a share, although that narrowed from a loss of $1.88 a share in the year-ago quarter. In November, shares again ramped higher on better-than-expected earnings for the third quarter.

Analyst Consensus: The one analyst covering Cost Plus recommends the stock as a "buy."

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1. Keyuan Petrochemicals ( KEYP)

Company Profile: Keyuan Petrochemicals is a maker of petrochemical products in China.

Closing Price: $4.45 (Dec. 17)

Total Return (YTD): 2,893%

Developments in 2010: Previously, the company was known as Silver Pearl Enterprises before it ceased operations in 2007. The U.S. shell company, which used to trade under the ticker SVPE, merged with Keyuan International Group Ltd. in May to form Keyuan Petrochemicals. Keyuan gained listing on the Nasdaq in September.

Analyst Consensus: There is no analyst coverage for Keyuan Petrochemicals.

-- Written by Robert Holmes in Boston.

>To contact the writer of this article, click here: Robert Holmes.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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