OSFOY - my pick
PDGE - PDG Environmental
We are all most likely familiar with this company. It has been both a tremendous surprise with the reaction to Hurricane Katrina, and a terrible dissapointment as earnings have missed (and declined) in 2006, and recent fraud was exposed in the Seattle office. The price has been beaten down from it's high around $2.70, and currently (Dec 12, 2006) trades around $1.00.
My basic premise behind picking PDGE for the stock of the year is based on several factors, and they are rather simple. Here they are:
1) revenue backlog is higher than current market capitalization
2) margins are improving
3) though more may come, the bad news has passed and has been digested by the market (why the price is so low)
4) Unrealistic expectations for immediate rebuild after the disasterous 2005 hurricane season are being quelled as people realize that it will take many years to re-build the gulf coast. This should provide PDGE with a steady market to capture over the next 5 years, so there is a longer term growth factor to the company
5) This little company now has analyst coverage by Rodman and Renshaw. I do not think that they would waste their time with a company unless there were some advantages to tracking the company.
6) Sentiment is down- future good earnings reports should be reflected by outstanding stock price appreciation as investors realize the error of basing their sentiment on the past public failures / hiccups
7) Current valuation is an opportunity for rapid percentage gains, hopefully adding to my chances of winning this contest!
Good luck
--think twice and bid once--
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