Top 5 Emerging Growth Stocks to Buy for January

by Louis Navellier | January 9, 2012 12:26 pm

Top 5 Emerging Growth Stocks to Buy for January

If you have cash to invest this month, I highly recommend these five below. Here they are, in no particular order:

Taiwan-based Silicon Motion Technology (NASDAQ:SIMO[1]) has its hand in lots of hot markets and is a big player in flash memory storage — flash memory cards, USB flash drives, card readers and solid-state hard drives. In fact, most of the NAND flash and next-generation flash products on the market — whether produced by Samsung (PINK:SSNLF[2]), SanDisk (NASDAQ:SNDK[3]), Toshiba, Micron (NASDAQ:MU[4]) or Intel (NASDAQ:INTC[5]) — are supported by Silicon Motion controllers. Silicon Motion also produces multimedia chips including embedded graphics processors, image processors and TV tuners. Lastly, it has been increasingly focused on controllers for smartphones, tablets and notebook PCs, as well as wireless transceivers for 4G LTE smartphones and tablets.

In the third quarter, Silicon Motion’s sales rose 25% to $63.2 million compared with $50.5 million in the second quarter. Looking forward, the analyst community is expecting annual fourth-quarter sales growth of 51% and 88.9% earnings growth. In the past three months, the analyst community has revised their consensus earnings estimate 32% higher — a phenomenon that typically precedes blowout earnings surprises.

Questor Pharmaceuticals (NASDAQ:QCOR[6]) likes a challenge. As a specialist of difficult-to-treat central nervous system disorders, the company has been particularly successful with its multiple sclerosis treatment, H.P. Acthar Gel. The company also makes Doral, which is used for the treatment of insomnia. In the massive biotechnology industry, Questcor is top-notch in terms of earnings per share growth and return on equity.

For the fourth quarter, the analyst community is expecting 127.4% annual sales growth and 265.7% earnings growth of 38 cents per share. In the past three months, the analyst community has revised their consensus earnings estimate 32.6% higher. Typically, such positive analyst earnings revisions precede future earnings surprises.

Hansen Natural (NASDAQ:HANS[7]) is the mastermind behind Monster, a dominant energy drink in the U.S. Looking at a can of Monster Energy drink, the flashy staple of sleep-deprived college students, one wouldn’t think that the company’s humble beginnings stem back to just one father and three sons working with a juicer in Southern California. In fact, although Hansen sells supercharged drinks like Monster and Java Monster, most of its drink roster is actually very wholesome. For example, it has 30 real fruit and spice soda flavors, a number of immune system-boosting drinks, vitamin waters and an array of teas and lemonades.

In recent quarters, Hansen Natural has reported “monster” sales and profit growth. Third-quarter sales jumped 24% from $381.5 million last year to $474.7 million this quarter. Over the same period, net income also rose 24% to $82.4 million, or 88 cents per share. Plus, speculation is heating up that Monster might be an acquisition target by Red Bull or one of the major soft drink companies. With Red Bull’s recent decision to pull out of NASCAR as a sponsor, a “monster” acquisition might be just what the energy drink maker needs to capture additional U.S. market share.

Spectrum Pharmaceuticals Inc. (NASDAQ:SPPI[8]) is familiar pharmaceutical company I once discussed in the Top 5 Emerging Growth Stocks for December[9]. Spectrum specializes in oncology — the treatment of cancer — and currently has two cancer treatments on the market: Fusilev, a treatment for advanced colon cancer, and Zevalin, a treatment for a type of lymphoma.

But what really excites me about this company is what it has in its pipeline: Spectrum has more than 10 drugs in either late-stage development or development! This includes Apaziquone, a treatment for bladder cancer, Belinostat, another lymphoma treatment and Ozarelix, a treatment of prostate cancer. This is a midsize biotechnology company already at the top of the industry — in terms of return on equity — and is about to experience blowout growth.

Jazz Pharmaceuticals Inc. (NASDAQ:JAZZ[10]) has two flagship drugs — Xyrem, the only narcolepsy treatment approved by the World Anti-Doping Agency, and Luvox CR, its obsessive compulsive disorder treatment. But there are a number of exciting developments on the near horizon, including Jazz’s massive buyout of Dublin-based Azur Pharma Ltd., which should close within the next couple of weeks, and the company’s subsequent moving of its headquarters to Dublin. After the move, Jazz will be able to take advantage of Ireland’s competitive tax rate.

The company’s sales climbed 63.3% and earnings surged 115.6% in the third quarter, and for the fourth quarter, the analyst community is expecting 54% annual sales growth and 70.5% earnings growth. Jazz Pharmaceuticals is flush with cash and recently prepaid $33 million in long-term debt, and I’m excited to see how developments play out in the company’s next earnings release. Also, despite those who might think that Jazz Pharma’s bullish run looks tapped out[11], I remain optimistic.

Endnotes:
  1. SIMO: http://studio-5.financialcontent.com/investplace/quote?Symbol=SIMO
  2. SSNLF: http://studio-5.financialcontent.com/investplace/quote?Symbol=SSNLF
  3. SNDK: http://studio-5.financialcontent.com/investplace/quote?Symbol=SNDK
  4. MU: http://studio-5.financialcontent.com/investplace/quote?Symbol=MU
  5. INTC: http://studio-5.financialcontent.com/investplace/quote?Symbol=INTC
  6. QCOR: http://studio-5.financialcontent.com/investplace/quote?Symbol=QCOR
  7. HANS: http://studio-5.financialcontent.com/investplace/quote?Symbol=HANS
  8. SPPI: http://studio-5.financialcontent.com/investplace/quote?Symbol=SPPI
  9. Top 5 Emerging Growth Stocks for December: http://investorplace.com/2011/12/top-5-emerging-growth-stocks-december/
  10. JAZZ: http://studio-5.financialcontent.com/investplace/quote?Symbol=JAZZ
  11. Jazz Pharma’s bullish run looks tapped out: http://investorplace.com/2012/01/jazz-pharmas-bullish-run-looks-tapped-out/

Source URL: http://investorplace.com/2012/01/top-5-emerging-growth-stocks-january-simo-qcor-hans-sppi-jazz/
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