Hot Small Cap Companies To Watch For 2014

Last week we held the monthly joint web chat for subscribers of The Energy Strategist (TES) and MLP Profits. The chat is conducted by Igor Greenwald, who is managing editor for TES and chief investment strategist for MLP Profits, and myself.

We got to most of the questions during this session, but there were a few that required an extended answer, or a bit more research. Of the remaining questions, there were about twice as many specific to MLPs versus those that pertained to conventional energy sector corporations. Below I will address most of the remaining MLP questions from the chat. For questions that weren’t MLP-specific, see this week’s issue of The Energy Letter.

Q: Are the general partner units always the best to hold for long term gains and MLP units for current income?

This question really piqued my interest. Intuitively, I felt like it was probably true, but I didn’t want to answer the question until I could dig into it a bit more. I thought it would be interesting to have a look at the historical performance of a few publicly-traded general partners versus their limited partner to find out if that hypothesis is supported.

Hot Small Cap Companies To Watch For 2014: OmniVision Technologies Inc.(OVTI)

OmniVision Technologies, Inc. designs, develops, and markets semiconductor image-sensor devices. The company offers CameraChip image sensors, which are single-chip solutions that integrate various functions, such as image capture, image processing, color processing, signal conversion, and output of a processed image or video stream for use in various consumer and commercial mass-market applications; and CameraCube imaging devices that are image sensors with integrated wafer-level optics. It also provides companion chips used to connect its image sensors to various interfaces, including the universal serial bus and other industry standard interfaces; and companion digital signal processors that perform compression in standardized still photo and digital video formats. In addition, the company designs and develops software drivers for Linux, Mac OS, and Microsoft Windows, as well as for embedded operating systems, such as Blackberry OS, Palm OS, Symbian, Windows CE, Windows Embedded, and Windows Mobile. Its products are used in mobile phones, notebooks, Webcams, digital still and video cameras, commercial and security and surveillance, and automotive and medical applications, as well as in entertainment devices. The company sells its products directly to original equipment manufacturers and value added resellers, as well as indirectly through distributors worldwide. OmniVision Technologies, Inc. was founded in 1995 and is based in Santa Clara, California.

Advisors’ Opinion:

  • [By John Kell]

    OmniVision Technologies Inc.’s(OVTI) fiscal third-quarter profit rose 43%, boosted by a one-time benefit related to the initial public offering of the company’s equity investee China WLCSP Ltd. Shares rose 15% to $18.60 premarket.

  • [By Jake L’Ecuyer]

    Shares of OmniVision Technologies (NASDAQ: OVTI) got a boost, shooting up 7.22 percent to $17.38 after the company posted better-than-expected Q3 results.

  • [By Jake L’Ecuyer]

    Shares of OmniVision Technologies (NASDAQ: OVTI) got a boost, shooting up 8.27 percent to $17.54 after the company posted better-than-expected Q3 results.

  • [By Jake L’Ecuyer]

    OmniVision Technologies (NASDAQ: OVTI) shares tumbled 6.32 percent to $14.98 after the company issued downbeat third-quarter forecast.

    Sears Holdings (NASDAQ: SHLD) was down, falling 7.90 percent to $51.16 after the company’s CEO Edward Lampert cut his stake in the company to 48.4% from 55.4%.

Hot Small Cap Companies To Watch For 2014: ATA Inc.(ATAI)

ATA Inc., through its subsidiaries, provides computer-based testing services in the People?s Republic of China. It offers services for the creation and delivery of computer-based tests utilizing its test delivery platform, proprietary testing technologies, and testing services; and provides logistical support services relating to test administration. The company?s computer-based testing services are used for professional licensure and certification tests in various industries, including information technology (IT) services, banking, securities, teaching, and insurance. Its e-testing platform integrates various aspects of the test delivery process for computer-based tests ranging from test form compilation to test scoring, and results analysis. ATA also provides career-oriented educational services, such as single course programs, degree major course programs, and pre-occupational training programs focusing on preparing students to pass IT and other vocational certification tests; test preparation and training programs and services to test candidates preparing to take professional certification tests in securities, futures, banking, insurance and teaching industries; online test preparation and training platform for the securities and banking industries; and test preparation software for the teaching industry. In addition, the company offers HR select employee assessment solution, an online system that utilizes its proprietary software and an inventory of test titles to help employers improve the efficiency and accuracy of their employee recruitment process. As of March 31, 2010, it had contractual relationships with 1,988 ATA authorized test centers. The company serves Chinese governmental agencies, professional associations, IT vendors, and Chinese educational institutions, as well as individual test preparation services. ATA Inc. was founded in 1999 and is based in Beijing, the People?s Republic of China.

Advisors’ Opinion:

  • [By Jake L’Ecuyer]

    Leading and Lagging Sectors
    Industrials stocks gained Friday, with ATA (NASDAQ: ATAI) leading advancers. Meanwhile, gainers in the sector included Plug Power (NASDAQ: PLUG), with shares up 22 percent, and Korn/Ferry International (KFY), with shares up 12 percent. In trading on Friday, basic materials shares were relative laggards, down on the day by about 1.36 percent.

  • [By Jake L’Ecuyer]

    Leading and Lagging Sectors
    Industrials stocks gained Friday, with ATA (NASDAQ: ATAI) leading advancers. Meanwhile, gainers in the sector included Plug Power (NASDAQ: PLUG), with shares up 22 percent, and Korn/Ferry International (KFY), with shares up 12 percent. In trading on Friday, basic materials shares were relative laggards, down on the day by about 1.36 percent.

Hot Small Cap Companies To Watch For 2014: InterDigital Inc.(IDCC)

Interdigital, Inc. engages in the design and development of digital wireless technology solutions. The company offers technology solutions for use in digital cellular and wireless products and networks, including 2G, 3G, 4G, and IEEE 802-related products and networks. It holds patents related to the fundamental technologies that enable wireless communications. The company licenses its patents to equipment producers that manufacture, use, and sell digital cellular and IEEE 802-related products; and licenses or sells mobile broadband modem solutions, including modem IP, know-how, and reference platforms to mobile device manufacturers, semiconductor companies, and other equipment producers that manufacture, use, and sell digital cellular products. InterDigital?s solutions are incorporated in various products comprising mobile devices, such as cellular phones, tablets, notebook computers, and wireless personal digital assistants; wireless infrastructure equipment, such as base stations; and components, dongles, and modules for wireless devices. The company was founded in 1972 and is headquartered in King of Prussia, Pennsylvania.

Advisors’ Opinion:

  • [By Holly LaFon]

    The most disappointing investment in the portfolio for 2013 was InterDigital (IDCC). This stock declined approximately 28% during the year, despite posting roughly 25% operating margins. Our thesis on IDCC is that the company should benefit from its wireless technology patents as more smartphones and mobile tablets are connected to the in ternet. IDCC creates wireless technology, applies for patents for the technology it creates, and then licenses its technology to manufacturers who produce the aforementioned products. In the past, Nokia, Samsung, Apple, LG, and many other manufacturers hav e licensed the company’s technology to use in their products and paid IDCC royalties.

  • [By James E. Brumley]

    Endeavor IP isn’t the only publicly-traded intellectual property enforcement company out there. It is, however, the only one to focus on quality over quantity. Whereas other players like patent portfolio names like InterDigital, Inc. (NASDAQ:IDCC) and Vringo, Inc. (NASDAQ:VRNG) will literally buy patents by the hundreds – perhaps sometimes without even knowing what some of those patents even cover – in an effort to arm itself with any and every possible patent for any and every contingency. Most are likely worthless, which means companies like InterDigital or Vringo may have wasted shareholder money by buying IP that isn’t capable of bearing revenue.

Hot Small Cap Companies To Watch For 2014: Rackspace Hosting Inc(RAX)

Rackspace Hosting, Inc. operates in the hosting and cloud computing industry. It provides information technology (IT) as a service, managing Web-based IT systems for small and medium-sized businesses, as well as large enterprises worldwide. The company?s service suite includes dedicated hosting comprising customer management portal and other management tools that manage data center, network, hardware devices, and operating system software; and cloud computing that enables customers to provide and manage a pool of computing resources, as well as delivery of computing resources to business when they need them. It offers cloud servers, cloud files, and cloud sites, as well as cloud applications, such as email, collaboration, and file back-ups; and hybrid hosting that provides a combination of dedicated hosting and cloud computing services. The company also offers customer support services. It sells its service suite through direct sales teams, third-party channel partners, an d online ordering. The company was formerly known as Rackspace.com, Inc. and changed its name to Rackspace Hosting, Inc. in June 2008. Rackspace Hosting, Inc. was founded in 1998 and is headquartered in San Antonio, Texas.

Advisors’ Opinion:

  • [By Jake L’Ecuyer]

    Rackspace Hosting (NYSE: RAX) was down, falling 17.02 percent to $33.40 after the company reported a drop in its fourth-quarter net income and announced the retirement of its Chief Executive Lanham Napier.

  • [By Myra P. Saefong]

    Rackspace Hosting Inc.’s stock (RAX)  sank 14% in the after-hours session. The company reported earnings of 14 cents a share for its fourth quarter, matching the market’s estimate, according to an estimate from FactSet. Revenue reached $408 million, above analysts’ forecast for $404.7 million.

  • [By Jon C. Ogg]

    Rackspace Hosting Inc. (NYSE: RAX) was supposed to have its earnings report out after the close of trading on Monday. The big news is not that Rackspace managed to beat revenue expectations – Rackspace also announced that Lanham Napier has retired from the company as Chief Executive Officer and as a member of the Board of Directors.

Hot Small Cap Companies To Watch For 2014: EZchip Semiconductor Limited(EZCH)

EZchip, a fabless semiconductor company, engages in the development and marketing of Ethernet network processors for networking equipment. Its products include network processor chips, evaluation boards and network-processor based systems, and development software toolkits. The company offers network processors for use in forming the silicon core of networking equipment, such as switches and routers; and for voice, video and data integration in various applications. Its network processors are single-chip solutions, which enable its customers to design multi-port line cards, such as processing and classification engines, traffic managers, media access controllers, as well as a range of specialized hardware blocks that accelerate various functions. The company offers Evaluation systems which enable customers to test NPU-based systems; and toolkits that assist customers in creating, verifying, and implementing solutions based on its network processors. It provides a library f eaturing data plane code for a range of applications, which include Metro Ethernet protocols, Multi-Protocol Label Switching, IPv4 and IPv6 routing, Access Control Lists, GPON/EPON OLT functionality, Network Address Translation, and Server Load Balancing. The company sells its products directly, and through contract manufacturers and distributors to network equipment vendors. It markets its products in Israel, China, Hong Kong, the Far East, Canada, the United States, and Europe. The company was formerly known as LanOptics Ltd. and changed its name to EZchip Semiconductor Ltd. in July 2008. EZchip Semiconductor Ltd. was founded in 1989 and is based in Yokneam, Israel.

Advisors’ Opinion:

  • [By Evan Niu, CFA]

    What: Shares of EZchip (NASDAQ: EZCH  ) have jumped today by as much as 13% after the company reported first-quarter earnings.

    So what: Revenue in the first quarter totaled $15.3 million, topping the Street’s forecast of $15.1 million. Non-GAAP net income per share came in at $0.23, which was right on target with expectations.

  • [By Paul McWilliams]

    Paul McWilliams: Oh, absolutely. Another company that most investors probably have never heard of is a tiny little Israeli semiconductor company named EZChip (EZCH).

  • [By Jake L’Ecuyer]

    EZchip Semiconductor (NASDAQ: EZCH) was also up, gaining 7.16 percent to $24.11 after a Cisco (NASDAQ: CSCO) announced a new product that would not threaten the company as previously thought. Equities Trading DOWN
    Shares of Cypress Semiconductor (NASDAQ: CY) were down 16.05 percent to $9.91 after the company lowered its Q3 forecast.

  • [By Lisa Levin]

    EZchip Semiconductor (NASDAQ: EZCH) shares climbed 5.80% to $23.53. The volume of EZchip Semiconductor shares traded was 635% higher than normal. EZchip Semiconductor’s PEG ratio is 1.57.

Hot Small Cap Companies To Watch For 2014: Sky-mobi Limited(MOBI)

Sky-mobi Limited engages in the operation of a mobile application store in the People?s Republic of China. It works with handset companies to pre-install its Maopao mobile application store on handsets and with content developers to provide users with applications and content titles. The users of its Maopao store could browse, download, and purchase a range of applications and content, such as single-player games, mobile music, and books. The company?s Maopao store enables mobile applications and content to be downloaded and run on various mobile handsets with hardware and operating system configurations. It also operates a mobile social network community, the Maopao Community, where it offers localized mobile social games, as well as applications and content with social network functions to its registered members. The company owns proprietary mobile application technology in the cloud computing, the MRP format, and SDK development environment. As of March 31, 2011, it had entered into cooperation agreements with approximately 523 handset companies to pre-install Maopao. The company was formerly known as Profit Star Limited and changed its name to Sky-Mobi Limited in October 2010. Sky-mobi Limited was incorporated in 2007 and is headquartered in Hangzhou, China.

Advisors’ Opinion:

  • [By Roberto Pedone]

    Another stock that’s starting to move within range of triggering a big breakout trade is Sky-mobi (MOBI), which, through its subsidiaries, engages in the operation of a mobile application platform embedded on mobile phones to provide mobile application store and services in the People’s Republic of China. This stock has been red hot so far in 2013, with shares up a whopping 88%.

    If you look at the chart for Sky-mobi, you’ll notice that this stock recently formed a triple bottom chart pattern at $3.31, $3.28 and $3.40 a share. That bottoming pattern occurred over the last two months. Shares of MOBI have now started to uptrend and flirt with its 50-day moving average of $3.76 a share. That move is quickly pushing MOBI within range of triggering a big breakout trade.

    Traders should now look for long-biased trades in MOBI if it manages to break out above some near-term overhead resistance levels at $3.71 to $3.83 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 145,934 shares. If that breakout triggers soon, then MOBI will set up to re-test or possibly take out its 52-week high at $4.96 a share. Any high-volume move above that level will then give MOBI a chance to tag its next major overhead resistance levels at $5.55 to $6.13 a share.

    Traders can look to buy MOBI off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $3.40 to $3.28 a share. One can also buy MOBI off strength once it takes out that breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Hot Small Cap Companies To Watch For 2014: Texas Instruments Incorporated(TXN)

Texas Instruments Incorporated engages in the design and sale of semiconductors to electronics designers and manufacturers worldwide. The company?s Analog segment offers high-performance analog products comprising standard analog semiconductors, such as amplifiers, data converters, and interface semiconductors; high-volume analog and logic products; and power management semiconductors and line-powered systems. Its Embedded Processing segment includes DSPs that perform mathematical computations to process and enhance digital data; and microcontrollers, which are designed to control a set of specific tasks for electronic equipment. The company?s Wireless segment designs, manufactures, and sells application processors and connectivity products. Its Other segment offers smaller semiconductor products, which include DLP products that are primarily used in projectors to create high-definition images; and application-specific integrated circuits. This segment also provides handhe ld graphing and scientific calculators, as well as licenses technologies to other electronic companies. The company serves the communications, computing, industrial, consumer electronics, automotive, and education sectors. Texas Instruments Incorporated sells its products through a direct sales force, distributors, and third-party sales representatives. It has collaboration agreements with PLX Technology Inc.; Neonode, Inc.; and Ubiquisys Ltd. The company was founded in 1938 and is headquartered in Dallas, Texas.

Advisors’ Opinion:

  • [By Victor Selva]

    Several tech vendors like Intel (INTC), IBM (IBM), Texas Instruments (TXN) and Hewlett-Packard (HPQ) have announced job cuts for 2014. These reductions will take effect in the near future while management will continue to explore additional opportunities to improve profitability. 

  • [By Paul Ausick]

    Texas Instruments Inc. (NASDAQ: TXN) saw short interest fall by 2.1% to 22.85 million shares, or 2.1% of the float. TI reported earnings last week, pulling the shares back from a 52-week high and cooling, for the moment at least, any added interest from short sellers.

  • [By Douglas A. McIntyre]

    Big tech seems to get smaller and smaller, both in terms of sales and number of employees. International Business Machines Corp. (NYSE: IBM) said it would rebalance its workforce. Texas Instruments Inc. (NASDAQ: TXN) announced it would cut 1,100 people. These announcements come shortly after Intel Corp. (NASDAQ: INTC) said it would fire 5,000 people. While job cuts from the recession may have ended, old tech cannot afford to hold on to its workers.

Hot Small Cap Companies To Watch For 2014: FuelCell Energy Inc.(FCEL)

FuelCell Energy, Inc., together with its subsidiaries, engages in the development, manufacturing, and sale of high temperature fuel cells for clean electric power generation primarily in South Korea, the United States, Germany, Canada, and Japan. The company offers proprietary carbonate Direct FuelCell Power Plants that electrochemically produce electricity from hydrocarbon fuels, such as natural gas and biogas. Its fuel cells operate on a range of hydrocarbon fuels, including natural gas, renewable biogas, propane, methanol, coal gas, and coal mine methane. The company also develops carbonate fuel cells, planar solid oxide fuel cell technology, and other fuel cell technologies. It provides its products to universities; manufacturers; mission critical institutions, such as correction facilities and government installations; hotels; and natural gas letdown stations, as well as to customers who use renewable biogas for fuel, including municipal water treatment facilities, br eweries, and food processors. The company was founded in 1969 and is headquartered in Danbury, Connecticut.

Advisors’ Opinion:

  • [By Monica Gerson]

    FuelCell Energy (NASDAQ: FCEL) tumbled 4.99% to $2.51 after falling 4.00% on Wednesday.

    Posted-In: market losersNews Movers & Shakers Intraday Update Markets

  • [By Ben Levisohn]

    Shares of Tesla have gained 0.8% to $232.83 at 12:18 p.m. That’s not bad considering that Plug Power (PLUG) is unchanged at $6.71, Ballard Power Systems (BLDP) has dropped 2.8% to $5.53 and FuelCell Energy (FCEL) has fallen 4.3% to $2.89.

Hot Small Cap Companies To Watch For 2014: Achillion Pharmaceuticals Inc.(ACHN)

Achillion Pharmaceuticals, Inc., a biopharmaceutical company, engages in the discovery, development, and commercialization of treatments for infectious diseases. The company focuses on the development of antivirals for the treatment of chronic hepatitis C; and the development of antibacterials for the treatment of resistant bacterial infections. Its drug candidates for the treatment of chronic HCV include ACH-1625, a protease inhibitor, which is in phase IIa clinical trial for the treatment of chronic HCV; ACH-2684, a pangenotypic protease inhibitor, which is in phase I clinical trial for the treatment of chronic HCV infection; and NS5A inhibitors for the treatment of chronic HCV infection, including ACH-2928, which is to enter a phase I clinical trial, as well as various additional NS5A inhibitors in preclinical development. Its pipeline of product candidates also includes ACH-702 and ACH-2881 for drug resistant bacterial infections; elvucitabine for HIV infection; and AC H-1095 for HCV infection. The company was founded in 1998 and is based in New Haven, Connecticut.

Advisors’ Opinion:

  • [By Roberto Pedone]

    An under-$10 biotechnology player that’s starting to trend within range of triggering a big breakout trade is Achillion Pharmaceuticals (ACHN), discovers, develops and commercializes anti-infective drug therapies in the U.S. and internationally. This stock has been destroyed by the sellers so far in 2013, with shares down big by 66%.

    If you take a look at the chart for Achillion Pharmaceuticals, you’ll notice that this stock has been trending sideways for the last month and change, with shares moving between $2.26 on the downside and $2.98 on the upside. This sideways trading pattern is occurring after shares of ACHN gapped down sharply in late September from $7.50 to under $3 with heavy downside volume. Shares of ACHN are now starting to trend higher and move within range of triggering a big breakout trade above the upper-end of its sideways trading chart pattern.

    Traders should now look for long-biased trades in ACHN if it manages to break out above some near-term overhead resistance levels at $2.85 to $2.98 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 2.76 million shares. If that breakout triggers soon, then ACHN will set up to re-test or possibly take out its gap down day high from September at $3.62 a share. Any high-volume move above that level will then give ACHN a chance to re-fill some of its previous gap down zone that started at $7.50 a share.

    Traders can look to buy ACHN off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $2.44 to $2.26 a share. One can also buy ACHN off strength once it clears those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

  • [By David Williamson]

    In this video, David Williamson describes how Achillion Pharmaceuticals (NASDAQ: ACHN  ) may challenge Gilead’s (NASDAQ: GILD  ) dominance in the Hepatitis C drug market. Achillion is concluding phase 2 clinical trials of its oral interferon medication, and so far, things are looking good. If successful in phase 3 trials, Achillion could directly challenge Gilead’s interferon medication. For investors, the success of Achillion’s drug is attractive, but the potential for Achillion to be a takeover target is even more enticing. The company has a market cap of around $575 million and could easily be bought out by the likes of Bristol-Myers Squibb.

  • [By Sean Williams]

    In terms of clinical updates, hepatitis-C-focused biotech Achillion Pharmaceuticals (NASDAQ: ACHN  ) announced updated midstage results for its lead compound, ACH-3102, on Tuesday. In trials of genotype-1b treatment naive patients, ACH-3102 plus a ribavirin delivered a 75% success rate in end-of-treatment virologic response. The problem with these results is that not only is Achillion far behind its all-oral peers in terms of development, but its 75% success rate trailed that of Gilead Sciences’ Sofosbuvir, which delivered 100% success rates in some of its late-stage trials featuring genotype-1 patients.

  • [By Dan Carroll]

    Few biotechs were hit as hard as Achillion Pharmaceuticals (NASDAQ: ACHN  ) this week, however. Achillion makes up around 2% of the weight of the SPDR Biotech ETF, and its 7.5% loss this week was a major reason for the fund’s fall. This stock has failed to capitalize on the markets’ surge this year, losing 10% year-to-date. The company only recently named a new CEO, lifting its former R&D head and chief science officer to the top job. Achillion’s still in the developmental stage of its life and thus produces no revenue, and the company’s cash burn makes it seem likely that more share dilution is on its way as the company looks to advance its hepatitis-C pipeline over the coming years. Until Achillion produces some meaningful results from that pipeline, this stock will remain a risky play in an already risky space.

Hot Small Cap Companies To Watch For 2014: OCZ Technology Group Inc(OCZ)

OCZ Technology Group, Inc. designs, develops, manufactures, and distributes computer components for computing devices and systems worldwide. It primarily offers solid state drives, flash memory storage, memory modules, thermal management solutions, AC/DC switching power supply units, and computer gaming solutions. The company?s products are used in industrial equipment and computer systems; computer and computer gaming solutions; mission critical servers and high end workstations; personal computer (PC) upgrades to extend the useable life of existing PCs; high performance computing and scientific computing; video and music editing; home theatre PCs and digital home convergence products; and digital photography and digital image manipulation computers. OCZ Technology Group, Inc. offers its products to retailers, on-line retailers, original equipment manufacturers, systems integrators, and distributors. The company was founded in 2002 and is headquartered in San Jose, Califo rnia.

Advisors’ Opinion:

  • [By Rich Duprey]

    The not-so-great and wonderful OCZ
    There was no company-specific news that caused solid-state-drive maker OCZ Technology (NASDAQ: OCZ  ) to fall almost 8% Wednesday. But an article that appeared on Seeking Alpha  questioning whether the company had six months or less to live before it filed for bankruptcy seemed to coincide with its fall.