December 11, 2006
Last week, we went in search of the very best small-cap stock for 2007. Well, the votes have been counted, and we're pleased to announce that Chinese wireless communications company KongZhong (Nasdaq: KONG ) is the winner of our contest.
How can KongZhong, whose ticker conjures up the image of the great hairy beast holding Jessica Lange in its paw, be a small cap? Lame jokes aside, this company may be small now, but our Foolish analyst Jim Fink expects great things in the years to come and believes it could be a double over the next year.
Jim argues that this pure-play in both wireless communications and emerging markets has enormous growth potential over the next few years. With wireless penetration rates of 33% in China as compared with 70% in the U.S. and 90% in Europe, Jim's investment thesis is compelling. Obviously, our readers agreed.
Closing out our top five in order of finish were:
- Atheros (Nasdaq: ATHR )
- Walter Industries (NYSE: WLT )
- Portfolio Recovery Associates (Nasdaq: PRAA )
- Syneron (Nasdaq: ELOS )
So, in our top five we have two foreign companies (KONG and ELOS), two wireless companies (KONG and ATHR), a debt collector (PRAA), and a diversified industrial goods company with multiple revenue streams (WLT). The one commonality is that they are all small companies with big futures. Will one of these become one of the market's 10 best stocks over the next 10 years? That's a tall bar to clear, but I wouldn't bet against any one of them.
Let us know what you think by signing up in Motley Fool CAPS, our new investment research service. You can rate each stock, offer your own pitch, and even get started on your own investment blog. And it's entirely free to do so. Just click here to get in the game.
John Reevesdoes not own shares of any of the companies mentioned in the article. Atheros and Portfolio Recovery Associates are Motley Fool Hidden Gems picks. The Fool has a disclosure policy.