"STEC (NASDAQ: STEC), a maker of flash memory and dynamic random access memory," is our latest "Stock of the Month'," says Dennis Slothower in Stealth Stocks.

"Over the past several years, the company has expanded its custom design capabilities of flash products for OEM applications.

"It has invested significantly in the design and development of customized flash controllers, firmware and hardware, and made strategic acquisitions that have expanded its flash design capabilities and sales and marketing infrastructure.

"Flash product revenue increased 20.2%, from $91.7 million in 2006 to $110.2 million in 2007, and increased 36.4%, from $110.2 million in 2007 to $150.3 million in 2008.

"The company expects its continued investments in flash custom design capabilities and controller development to result in sustained revenue growth from its flash product line in 2009.

"STEC makes solid-state drives that are designed to replace disk drives and are built using NAND flash memory chips. The drives are known as solid-state drives because they have no moving parts. They are more durable and use less power than disk drives and work in extreme temperatures.

"These devices tend to be faster at retrieving stored data and more energy efficient and shock resistant than disk drives. The best part is that STEC enjoys a near monopoly on solid-state drives. Sales have more than tripled from last year. How many companies can say that in this economy?

"According to my numbers, STEC should be selling in the low $60s over the next three to five years. It is currently trading in the high $30s, so STEC has large upside potential.

"Place a sell stop at 25% below your entry price. As the stock rises, continue to raise your stop so that you are trailing the Friday close by 25%."
 

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