52-week low / high: $3.56/ $9.42
Shares Outstanding: 37.96 million
Market Capitalization: $232 million

Only five years old, Sutor Technology Group (Nasdaq:SUTR) is already one of the leading makers of steel-finishing fabrication products in China. The company makes hot-dip galvanized steel, which accounts for about half of the company’s revenue, and pre-painted galvanized steel, which made up about 32% of the firm’s revenue during fiscal 2007 ended June 30. Because of China’s skyrocketing economic expansion, most of Sutor’s products are supplied to the Chinese market, and only about 10% goes abroad.

In Sutor’s most recent quarter — the third quarter ended March 31 — the company’s revenue edged up slightly to $45.3 million from $45 million a year earlier. However, Sutor’s quarterly net income doubled to $7.8 million, or $0.21 per share, versus $3.9 million, or $0.11 per share, a year ago. Cost of revenue during the three months jumped 38% to $98.1 million from $71.3 million during the prior-year period.

For the fourth quarter, Wall Street analysts expect Sutor to post revenue of $110 million and per-share earnings of $0.21. For the year, Wall Street projects $422.5 million on earnings of $0.76 per share.

“I am pleased to report another strong quarter of growth driven by solid execution of business strategy focusing on vertical integration to provide a total solution for our customers,” CEO Lifang Chen said in a statement. “We completed Phase I of our vertical integration plan by installing the cold-rolled steel and acid-pickled steel production lines. The addition of these production lines diversified our product portfolio, enhanced the quality of our sourcing, and mitigated our supply chain risks.”

The China-based company recently shuffled its management team. On May 14, Sutor named Lifang Chen its new chief executive officer. Chen replaced Liuhua Guo, who assumed a position focused on technical issues and business development opportunities. Chen also retained her position as chairperson.

In the current volatile environment, Sutor’s stock has fared well. For the first seven months of 2008, SUTR is up 15%.

52-week low/high: $5.79/$27
Shares Outstanding: 42.72 million
Market Capitalization: $331 million

More than 75 million Americans suffer from pain — more than the number of people with diabetes, heart disease and cancer combined. Prescription medications exist; however, the abuse of such, especially by younger people, complicates physicians’ ability and/or willingness to treat pain. Enter Acura Pharmaceuticals (Nasdaq:ACUR), a company that specializes in prescription drug abuse deterrents. 

The company has seen broad-based institutional interest as of late. According to Nasdaq.com, seven new positions were initiated as of March 31, 2008 in Acura, while eight existing investors increased their positions. On the flip side, only one position was decreased and sold out. Those who initiated new positions as of March 31 were UBS (NYSE:UBS), Merrill Lynch (NYSE:MER), Black Rock (NYSE:BLK), Wells Fargo (NYSE:WFC) and Deutsche Bank (NYSE:DB).

The Palatine, Ill.-based firm specializes in development of opioid pain medicines using what it calls Aversion technology, which is a patented platform designed to develop pharmaceutical products that are intended to relieve moderate to severe pain and deter common methods of prescription drug abuse (injection, nasal snorting and intentional swallowing). Acura’s lead product candidate is acurox — orally administered release tablets with oxycodone to treat severe pain.

In fact, Acura in conjunction with pharmaceutical company King Pharmaceuticals (NYSE:KG) recently reported positive results for a phase III study on the acurox tablets and expects to submit a new drug application to the FDA for acurox tablets by year end.

Acura also has a license agreement with King to develop opioid analgesic products using the aversion technology (opioid is a chemical used in drugs for pain relief). The two are currently jointly developing three immediate-release opioid analgesics using the aversion technology.

The alliance with King, consummated in December 2007, has proven to be a sagacious move, as the company is already realizing revenue accretion. In 2008, Acura recognized $17.1 million in revenues, adding to a strong first quarter.

For the first three months ended March 31, 2008, the latest quarter for which results were available, the company reported net income of $7.4 million, or $0.15 per, compared with a net loss of $9.2 million, or $0.26 per share for the same quarter in 2007.

Drilling down further into the financials, the company has just closed in on profitability. Acura swung to a profit in the fourth quarter of 2007. The company began generating positive cash flows from operations in 2007 and has been steadily increasing its cash position. As of April 30, 2008, the company had cash and cash equivalents of approximately $30 million with no term indebtedness.

Gross margins are higher than the industry at 100%, while the industry sits at 69%. Operating margin was 39.17% compared with -19.84% for the industry.

52-week low/high: $9.20/$23.57
Shares Outstanding: 20.65 million
Market Capitalization: $464 million

With all the talk of alternative energy, there’re still prolific profits to be made for companies whose modus operandi is sniffing the four corners of the earth for a scent of black gold. Be it offshore, onshore, coal bed, fields and the very depths of the earth, literally striking it rich is an appealing prospect to even the little guys, which is where Approach Resources Inc. (Nasdaq:AREX) comes in.

Small-cap Approach seeks natural gas and oil properties onshore in the United States and British Columbia, hunting mainly for natural gas reserves in known tight sands and shale gas areas. The Fort Worth, Texas company operates substantially all of its proven reserves, giving it control over capital expenditures and other operating matters. Its interests are in West Texas, East Texas, Northeast British Columbia, North New Mexico and Southwest Kentucky; total leasehold interests are a net 191,182 acres, or nearly 300 square miles.

Of those interests, all of Approach’s proven reserves and production are in the Ozona Northeast and Cinco Terry in west Texas, and in North Bald Prairie in east Texas. Proven reserves were 89% natural gas. Proven reserve life is 21 years. 

By concentrating on properties already producing, Approach in 2008 expects to increase natural gas production to 7,400 to 7,700 million cubic feet (MMcf), up from 4,900 MMcf in 2007. Oil production is expected at 120 to 125 thousand barrels (Mbbl) up from 80 Mbbl in 2007.

Those are great expectations. But then there are costs. One study by the Ziff Energy Group early this year said unit operating costs in the Permian Basin, located mostly in west Texas, have increased significantly. For oil fields, the average operating cost increased 34% in the 12 months from mid 2006 to mid 2007 — in line with the rise in oil prices — to $10.42 per barrel. For gas fields, the average rose 45% to nearly $1.35 per thousand cubic feet.

Big operators in the Ziff study had much lower operating costs than the averages, so the smaller guys have been carrying the burden: industry research points out the impact on explorers and developers, who must hustle for acreage and pay steeply for reserves that will produce in the future, when the price of energy may be quite different that that of today.

So far, Approach has beared the burden well. For the quarter ended March 31, 2008, net income for the first quarter of 2008 was $2.8 million, or $0.13 per diluted share, on revenues of $19 million, compared with a net loss of $581,000, or $0.06 per diluted share, on revenues of $9.4 million for the first quarter of 2007. EBITDAX increased 75% to $15.2 million from $8.7 million for the first quarter of 2007. Production for the first quarter of 2008 totaled 2 Bcfe, compared with 1.4 Bcfe produced in the first quarter of 2007, an increase of 46%. First quarter 2008 production was 84% natural gas and 16% oil and NGLs, compared with 91% natural gas and 9% oil and NGLs in the first quarter of 2007.

When sifting through potential investments, don’t ignore Approach before it slips through your fingers in pursuit of a higher stock price.

Note: Approach Resources Inc. (Nasdaq:AREX) is on the “Watch List” of Rising Star Stocks, a subscription investment newsletter from Business Financial Publishing, which also publishes SmallCapInvestor.com. As a Watch List company, Approach displays many characteristics found in successful stock winners, and is being closely monitored for possible inclusion in the Rising Star Stocks portfolio at a later date.

52-week low/high: $12.15/$25.99
Shares Outstanding: 40.33 million
Market Capitalization: $948 million

Much like the energizer bunny that keeps going and going, Polypore International, Inc. (NYSE:PPO) isn’t showing signs of slowing down any time soon. 

The chemical company develops polymer-based membranes used to separate various materials from liquids and operates in two segments: energy storage and separations media. The energy storage segment develops polypropylene and polyethylene membrane separators for lithium batteries that are used in personal electronic devices, power tools and other electric vehicles. This segment also offers polymer-based membrane separators for lead-acid batteries, which are used in batteries for automobiles and other motor vehicles.

The separation media segment manufactures filtration membranes and modules, which are used in health-care, industrial, and specialty filtration applications. This segment also provides membranes for hemodialysis, blood oxygenation and plasmapheresis applications.

Polypore sells its products and services primarily to manufacturers and converters who incorporate its products into their finished goods. 

One of the keys to this company is that it sells its products to manufacturers whose end markets retain a strong outlook. Demand for lithium-ion batteries for hybrid cars and electric cars (for example) is on the rise as the technology burgeons. With oil breaching new highs everyday, the electric car looks more and more like a viable option for the consumer. According to William Blair & Co. the lithium battery and hemodialysis industries are projected to grow 10% and 7%, respectively in the long term.

Aside from strong end-market demand, the company generates 75% of its revenues overseas — which is good news for investors looking for international exposure as the domestic economy continues to languish. The company announced this month that it acquired Yurie-Wide Corp., a South Korean company that develops technology for the manufacture of polyethylene separators for lithium-ion batteries. The addition broadens its lithium-ion product portfolio and offers a manufacturing base in Asia, essentially augmenting its prospective customer base.

You might not think this business is all that electrifying, but the company’s financial results and share price are exhilarating. Since going public roughly 10 months ago, the chemical company has clocked three solid quarters, surprising to the upside. Mirroring such robust quarters, the share price has appreciated 48% year to date.

For the first quarter ended March 29, 2008, net income rocketed 225% to $10.6 million, or $0.26 per diluted share, from $2.1 million, or $0.08 per share, in the first quarter of 2007. Sales increased 13% to $145.3 million from $129 million for same quarter last year.

These consecutive robust results should come as no surprise. According to William Blair analyst Brian Drab, the company benefits from recurring revenue streams mostly from the replacement-car-battery market and consumable membranes in health-care applications. However, the analyst warns that Polypore’s lithium business, one of the company’s primary long-term growth engines, can be volatile, with growth varying meaningfully from quarter to quarter.

If revenues keep going and going, as purported, so should the stock price.

Note: Polypore International Inc. (NYSE:PPO) is on the "Watch List" of Growth Report, a subscription investment newsletter from Business Financial Publishing, which also publishes SmallCapInvestor.com. As a Watch List company, Polypore displays many characteristics found in successful stock winners, and is being closely monitored for possible inclusion in the Growth Report portfolio at a later date.

These days, Pennsylvania isn't only about the Amish, the Pittsburgh Steelers and a pro-Hillary Clinton vote. Unbeknownst to many, oil has taken center stage, in the form of oil exploration company Rex Energy Corporation (Nasdaq:REXX).

Rex Energy is based in State College, Pa., best known as home to Penn State University. The company has been scoring key explorations in its back yard of the Appalachian region of western Pennsylvania and West Virginia.
Rex also operates in the Illinois Basin region of Illinois and Indiana, the New Albany shale deposit throughout southern Indiana, and in the Permian region found in Texas and New Mexico.

Riding a wave of improved drilling techniques, better exploration technologies and soaring demand, Rex is off to a fast and furious start as a public company. With oil and natural gas prices shooting to stratospheric heights, smaller companies with a track record and decent potential have enticed investors to take notice.

Since emerging through an initial public offering last summer from a variety of partnerships and tiny entities, Rex has roared to life with a steady stream of announcements of added drilling acreage and project successes.

Technology is also driving Rex’s growth. For example, in the Illinois Basin from the 1960s through the 1980s, Marathon Oil Corporation (NYSE:MRO), the former Texaco, Exxon Mobil Corporation (NYSE:XOM) and Shell developed surfactant-polymer projects that became cost-prohibitive when oil was trading far below $50 a barrel. At double that price, there's money to be made from some of these difficult-to-deliver deposits. Rex is testing a process known as alkali-surfactant-polymer flooding that reduces production costs.

Thus far, Rex has been successful at finding its black gold: for the quarter ended March 31, 2008, the company clocked in operating revenues of $18.4 million, a 40.3% increase compared with operating revenues of $13.1 million for the same period in 2007. Production volumes were 257,370 barrels of oil equivalent, up 3.3% from the same period in 2007.  Although the company reported a loss before provision for taxes of $12 million for the first quarter of 2008, compared with a net loss of $5 million for the first quarter of 2007, EBITDAX was $8.7 million in the first quarter of 2008. This was an increase of 67.1% over the same quarter of 2007, and an increase of 20.8% over the fourth quarter of 2007.

"This was a solid quarter with both revenue and EBITDAX experiencing strong growth over the first quarter of 2007. We were able to continue a trend of steady production growth despite experiencing record levels of flooding in the Illinois Basin, which caused us to shut-in some of our oil fields for periods during the quarter,” said Benjamin Hulburt, president and CEO of Rex Energy.

For more on the company, read Rex Energy: Eureka!.

Note: Rex Energy Corporation (Nasdaq:REXX) is on the "Watch List" of Growth Report, a subscription investment newsletter from Business Financial Publishing, which also publishes SmallCapInvestor.com. As a Watch List company, Rex Energy displays many characteristics found in successful stock winners, and is being closely monitored for possible inclusion in the Growth Report portfolio at a later date.

52-week low / high: $2.64/ $5.09
Shares Outstanding: 26.56 million
Market Capitalization: $125.01 million

Colorado Springs has a long history of invention and technology. Because the city is one of the most active lightning strike areas in the United States, the genius inventor Nikola Tesla built his lab and studied electricity in the city. In 1984, Ramtron International (Nasdaq:RMTR) also decided to make Colorado Springs its home.

The research and development firm makes and markets ferroelectric memory chips and microcontroller and integrated semiconductor solutions. Ferroelectric memory is non-volatile computer memory that offers high-speed writing, low power consumption and extended rewriting life. The chips can be written and rewritten over a trillion times.

When a material shows spontaneous electric — plus or minus — polarization, the material shows the ferroelectricity phenomenon. Ferroelectricity was first recognized in a crystal in 1921 by Joseph Valasek, a University of Minnesota physics instructor. Ramtron was able to create memory chips using ferroelectricity in 1992 and went public in 1993 in response to the promise F-RAM chips held. The market was slow to adopt the new technology and since going public, shares of the company are down more than 86%.

However, Ramtron has been finding additional uses for F-RAM chips and revenue has experienced an upward trend. In 2007, revenue totaled $51.1 million, up 26% from $40.5 million in 2006 and up 49% from $34.4 million in 2005. Wall Street analysts, on average, expect Ramtron to post revenue of $64 million in 2008, which would represent a 25% improvement. Ramtron says it expects 2008 revenue to range from $63.4 million to $65.4 million.

In its 2007 annual report to investors, Ramtron said its 2008 plan “anticipates growth in all of our end markets, particularly in the computing area as our custom devices for printer cartridges gain momentum.”

To drive growth, the firm released 17 new products in 2007 and plans 14 more for 2008. Ramtron expects 27% of sales to come from its metering devices segment, 34% from computing and information systems, 14% from automotive and 25% from industrial, scientific and medical.

Earnings are also improving. After posting losses in 2003 and 2005, Ramtron clocked a profit of $9.9 million, or $0.37 per share, in 2007. The yearly earnings improved more than 18 times from $0.5 million, or $0.02 per share, during 2006.

Wall Street’s opinion on Ramtron is so-so. Analysts rate the stock 2.5, with 1 being a “strong buy” and 5 being a “sell.” The one analyst surveyed by Thomson/First Call has a $10 price target on the stock. On Feb. 15, investment bank Collins Stewart downgraded Ramtron to “hold” while slashing its 2008 earnings estimate to $0.16 from $0.25 a share. In a note to investors, Collins Stewart said the downgrade was based on valuation.

For more on the company, read Ramtron International: Tough little memory chips with a big future.

Note: Ramtron International (Nasdaq:RMTR) is on the “Watch List” of Rising Star Stocks, a subscription investment newsletter from Business Financial Publishing, which also publishes SmallCapInvestor.com. As a Watch List company, Ramtron displays many characteristics found in successful stock winners, and is being closely monitored for possible inclusion in the Rising Star Stocks portfolio at a later date.

52-week low / high: $13.55/ $29.72
Shares Outstanding: 12.09 million
Market Capitalization: $325 million

If they weren’t already aware, the award-winning film “There Will Be Blood” helped hammer home the point to Americans that people make money in the oil business — a lot of it. Demand for oil and gas is greater than supply and — with a rising population and increasing international modernization — the gap is increasing, making the business fundamentals hard to beat.

Texas-based small cap Natural Gas Services (AMEX:NGS) fabricates, makes, rents and sells natural gas compressors and related equipment. Its primary focus is renting natural gas compressors, which are mechanical devices used to increase gas pressure by reducing volume.

The firm usually contracts out compressors for periods between six months and two years. Most of the customers continue renting the compressors on a month-to-month basis after their contract runs out, according to the company.

The biggest factor that determines Natural Gas Services’ success is the worldwide supply and demand for natural gas. According to regulatory filings, the company expects its business activity to mostly track the levels seen in the natural gas industry overall. Changes in domestic natural gas production, consumption and prices affect the firm more than similar changes in crude oil.

The firm also believes the demand for compression services is driven by declining oil reservoir pressure. Oil producers are increasingly focusing on non-conventional natural gas production — coalbed methane, gas shales and tight gas — which usually requires more compression than normal reservoirs. If companies continue to go to the largest publicly traded provider of small- to medium-horsepower gas compressors, Natural Gas Services’ investors will continue to enjoy rising profits.

The company aims to meet rising demand by expanding its rental revenue. During the recently completed first quarter, rental revenue grew 30% to $9 million from $6.9 million a year earlier. It plans to grow in 2008 by adding 300 to 350 compressors to its overall fleet. The firm added 69 compressor units to its fleet during the first quarter. On March 31, the company had 1,422 compressors, up 23% from 1,157 units a year earlier.

“We were able to [add compressor units] in spite of moving into our new facility in the first quarter and lost time of over 1,500 hours due to flue and illness,” Taylor said during a conference call with investors on May 6.

In the recently ended first quarter, Natural Gas Services recorded a 13% boost in revenue to $18.9 million, from $16.7 million a year earlier. Wall Street analysts, on average, anticipated $20.9 million in revenue.

In a press release, Natural Gas Services said it believes market fundamentals for natural gas are favorable. For the three months ended March 31, the Midland, Tex.-based firm’s net income increased 31% to $3.5 million, or $0.29 per share, compared with $2.7 million, or $0.22 per share, a year ago. The consensus estimate on Wall Street was earning $0.28 per share.

Operating costs and expenses during the first quarter jumped to $13.5 million versus $12.5 million during the same period of 2007. Net cash provided by operating activities rose to $8 million from $7.9 million during the prior-year period. The company had $155.2 million in assets at the end of the first quarter, compared with $153.2 million a year earlier.

Note: Natural Gas Services Group, Inc. (AMEX:NGS) is on the "Watch List" of Growth Report, a subscription investment newsletter from Business Financial Publishing, which also publishes SmallCapInvestor.com. As a Watch List company, Natural Gas Services displays many characteristics found in successful stock winners, and is being closely monitored for possible inclusion in the Growth Report portfolio at a later date.

52-week low/high: $3.56/$31.99
Shares Outstanding: 25.32 million
Market Capitalization: $788 million

Christmas may be a ways away, but it’s what we do all year that determines whether Santa leaves a lump of coal or presents in our stockings. Receiving a lump of coal this year, though, may not be all that bad.

The domestic coal industry is expected to play a strong role in meeting the world's demand for coal, and one way to profit off that is through James River Coal Company (Nasdaq:JRCC), a Richmond, Va.-based steam and industrial grade coal producer that sells coal to electric utilities and industrial customers.

The outlook for domestic and international coal markets remains robust for the foreseeable future. Underlying demand for coal from developing economies in several regions of the world is continuing to grow faster than the industry can grow international supply. Spot prices for a ton of coal are rocketing. Just this week, a ton of coal over-the-counter was going for $100 for 2008, while prices for 2009 are over $90 and prices for 2010 are between $85 and $90. This compares with an average spot price of $55 in 2007. Domestically, inventory in the mid-Atlantic region is tight, while the southeast region is growing progressively tighter. James River is positioning itself appropriately.

The small cap has a new strategy on tap for coal contracts. The company plans to use its remaining open tonnage in 2008 as part of a package for customer requirements for longer-term contracts. Thus far, James River has been able to capitalize on the stronger coal markets by adding to contract positions for 2009 and 2010. The company said it would like to have a total of approximately 4 million to 5 million tons of expected 2009 production and 2 million to 3 million tons of expected 2010 production under contract by late July.

The company had a bit of downer first quarter; however, it was owed mostly to one-time items and outside forces such as unusually severe rain, new regulations and commodity related cost inflation. James River clocked a net loss of $16.7 million, or $0.78 per share for the first quarter of 2008, widening from a net loss of $7.3 million or $0.46 per share for the first quarter of 2007. That’s not to say the company has shrugged off these systematic factors — it has taken steps to adjust its mine portfolio to the new regulatory and cost environment. Additionally, weather patterns have returned to normal and its Triad mine located in southwestern Indiana has returned to expected production levels.

After earnings were reported on Tuesday, the stock climbed some 10% — a good sign despite the down quarter.

Going forward, James River plans to streamline costs and pay down debt, as it transitions from costly deep underground mines to lower-cost surface-mining operations.

Analysts have upwardly revised estimates for fiscal 2008 and 2009 and are purporting sales will grow 19% in 2008 and 22% in 2009. UBS upgraded James River to a “buy” from “neutral” on April 30, while Raymond James upgraded it to “outperform.” The company trades at a price-to-sales ratio of 1.21 while the industry has a P/S of 3.26.

Remember the advantage individual investors have over Wall Street institutions is that they can ride investment trends for the long haul. The market for coal is exhibiting favorable long-term trends that individual investors can capitalize on, while Wall Street is driven by short-term returns. James River Coal could be the investment vehicle for that scenario.

For more on James River Coal Company, read our spotlight on the company.

Note: James River Coal Company (Nasdaq:JRCC) is on the “Watch List” of Rising Star Stocks, a subscription investment newsletter from Business Financial Publishing, which also publishes SmallCapInvestor.com. As a Watch List company, James River displays many characteristics found in successful stock winners, and is being closely monitored for possible inclusion in the Rising Star Stocks portfolio at a later date.

52-week low / high: $30.24/$60.44
Shares Outstanding: 6.42 million
Market Capitalization: $309 million

1968. Sen. Robert F. Kennedy was assassinated, 2001: A Space Odyssey premiered to the delight of sci-fi enthusiasts everywhere, and a little-known business that would eventually become Hurco Companies, Inc. (Nasdaq:HURC) was just beginning to take root.

Forty years later, Indianapolis, Ind.-based Hurco has maintained the same mission it had from its inception: to provide original, cutting-edge products to help its customers maximize productivity through reduced setup time and multi-tasking on the shop floor.

Hurco designs, manufactures and sells computerized machine tools, computer control systems and software products to global businesses in the metal working industry. Hurco also makes and distributes software options, control upgrades, hardware accessories, and replacement parts for its machine lines, as well as provides operator training and support services.

In layman’s terms, Hurco supplies businesses with “user-friendly” machinery and the software that powers them. It doesn’t take long to realize that speaking in “layman” is Hurco’s stock and trade. The company realizes that its customers need simplicity to productively manage their businesses, so allowing clients to process high-level, user-friendly programs in the simplest way possible gives them the benefits of rapid prototyping, integrated networking and quick turn-around, among other things. To make its products even more easy-to-use and uncomplicated, Hurco’s software also includes 3-D, conversational tool and laser probing, and translation and editing capabilities for clients to utilize.

The company’s wares are used by precision tool, die, and mold manufacturers; independent metal parts manufacturers; and specialized production application or prototype departments within manufacturing companies. It caters to the aerospace, defense, medical equipment, energy, automotive/transportation, electronics, and computer equipment industries.

Hurco’s endeavors are no trivial pursuit: for the first quarter ended Jan. 31, 2008, net income was $7.8 million, or $1.21 a share, up 45% from the $5.4 million, or $0.84 a share, reported in the first quarter of 2007. Sales rose 30% to $60.9 million from the $46.9 million reported last year. The weaker dollar boded well in Hurco’s favor when translating foreign sales to U.S. dollars: the impact was about 10%, or $4.6 million, in the year-to-year comparison.

The company’s growth was driven by demand in existing European markets, expansion into Eastern European markets, and a strong push into India, which Hurco began targeting last year.

New order bookings in the first quarter of fiscal 2008 were up 30% to $61.1 million, compared with $14 million in the prior-year period. Europe and the Asia Pacific accounted for $14,180,000, or 44%, and $603,000, or 27%, respectively. North American orders fell by $750,000, or 6%, but that didn’t exactly faze CEO Michael Doar.

“Strong first-quarter results, despite market softness in the United States, affirm the importance of our global strategy,” Doar said in a statement when earnings were released on Feb. 28. “Europe continues to exceed expectations. Increased sales in the Asia Pacific region are a direct result of the resources we devoted to India last year to expand our presence in this key market. We will continue to monitor the U.S. market closely.''

If the past has been any indicator, the company’s future is a wide, open road. Increased reliance on markets outside of the United States, especially emerging markets such as India, coupled with a weak dollar, are playing into Hurco’s pockets nicely. In the decades since its inception, popular trends and technologies have come and gone, but Hurco has remained strong, proving that consistency is the true test of profitable endurance.

Note: Hurco Companies, Inc. (Nasdaq:HURC) is on the “Watch List” of Rising Star Stocks, a subscription investment newsletter from Business Financial Publishing, which also publishes SmallCapInvestor.com. As a Watch List company, Hurco displays many characteristics found in successful stock winners, and is being closely monitored for possible inclusion in the Rising Star Stocks portfolio at a later date.

52-week low / high: $29.78/$131.14
Shares Outstanding: 11.92 million
Market Capitalization: $1.21 billion

Who knew that crop irrigation and traffic flow could be such a fateful match? Lindsay Corporation (NYSE:LNN) has successfully melded the two segments under its umbrella of self-propelled center pivots and crash cushions, proving that a love affair between apples and oranges can exist under the right conditions.

Lindsay manufactures the joints of the irrigation industry – in the form of lateral move irrigation systems and self-propelled center pivots, both used to stabilize crop production while preserving water, energy and labor. These products are marketed domestically and internationally under its Zimmatic brand. Lindsay also makes separate lines of center pivot and lateral move irrigation equipment for use on smaller fields under its Greenfield and Stettyn brands, and hose reel travelers under the Perrot brand.

If that’s not enough to get you thinking of “greener” pastures, the company also produces irrigation controls, mini-pivots, hose reel travelers, and chemical injection systems and remote monitoring and control systems, which include remote telemetry and a Web or personal-computer-hosted data acquisition and monitoring application.

For investors wanting to plant a more industrial seed in their portfolios, Lindsay dabbles in not only irrigation, but also infrastructure. This segment produces and markets large diameter steel tubing, movable barriers for traffic lane management, and crash cushions (used at toll booths, freeway off-ramps, medians and roadside barrier ends, bridge supports, utility poles, reflective pavement tapes and other road safety devices). The company also provides outsourced manufacturing and production services to other businesses.

Lindsay’s recent results are a resounding green light to financial success. Buckle your seatbelts, profits ahead: net income for the three months ended Feb. 29, 2008 jumped a whopping 288% to $9.7 million, or $0.79 per share, from $2.5 million, or $0.21 per share. Lindsay's gross margin improved to 27.7% from 22.7% a year ago, while revenue soared more than 70% to $108.4 million. The company’s EPS of $0.79 beat the consensus by 132%. Quarterly results included revenue from recently acquired businesses Watertronics Inc. (a leader in water pumping stations and controls for the golf, landscape and municipal markets) and Snoline SpA.

"Demand for irrigation equipment is strong globally, supported by higher commodity prices, biofuel expansion and water initiatives," says Rick Parod, Lindsay's president and chief executive officer. "Infrastructure segment demand for the unique solutions provided by our products is also strong, and we continued to realize synergies from the acquisitions in this segment during the period."

With Lindsay’s segments flirting with robust demand for irrigation products in 2008 both domestically and internationally, and consistent growth of roads and highways, the pair sound like a match made in investor heaven.

For more information on the company, read Lindsay Corporation: The rainmaker.

Note: Lindsay Corporation (NYSE:LNN) is on the "Watch List" of Growth Report, a subscription investment newsletter from Business Financial Publishing, which also publishes SmallCapInvestor.com. As a Watch List company, Lindsay displays many characteristics found in successful stock winners, and is being closely monitored for possible inclusion in the Growth Report portfolio at a later date.