small caps to watch for big returns

thought it was worthy of its own thread. Not that you should put to much store in what the media come up with but at least its getting some attention.

I see ETC made the AFR today in an article titled "Small caps to watch for big returns"

I don't have a link to the article but the key points are

- the market has been unsure whether to take mgmts $48m NPAT guidance for the year seriously as it is a big jump from the previous year

- but there are signs the company is winning over skeptics having risen 830% in 12 weeks. (my comment - the 830% s a typo in the article and is more like 83%)

- if the company hits profit guidance it is only trading at 4-5 times earnings

- with most govts grappling with issues of higher security ETC is in a favourable position to win new contracts - says the CIO of Atoms funds mgmt David Shearwood.

- Shearwood believes the ETC's NPAT could double in 2009-10.

- although he warns one of the key risks is delays in payments from clients is a problem

- Bull Case - some experts think the stock could double over the next year. looks cheap if mgmts earnings guidelines are to be believed.

- Bear Case - Lumpy cash flows. Risk of delayed payments. Outlook also hinges on contract wins and sometimes in emerging countries with higher political risks.

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Over and out.