Sometimes, Microcaps Offer Huge Returns

Sometimes, Microcaps Offer Huge Returns

The events of September 11, 2001, marked a watershed in American history. Before this point in time, airport security was handled like any other business. There was no Department of Homeland Security. The current upswing in this industry has been taken advantage of by investors. They, like most other investors, like well-known companies and stocks. This results in many small-cap shares going unnoticed.

Micro-cap stocks have a share price of $5 or less. You can and should diversify your portfolio to include micro-cap stocks, even though doing so is unlikely to make you the next Warren Buffet. Micro-caps aren't going to make you rich, but they also won't leave you destitute. There's very little danger involved because the asking price is so low. Stocks at this price range can be a great purchase for anyone looking to either strengthen their existing portfolio or get their feet wet in the investment world without spending a fortune.

Investigating some homeland security companies can be more challenging than investigating a more established firm like General Electric because many of these firms are still in their infancy. You can locate some great stocks if you put in the effort.

Management, the most popular items in the sector, and the company's track record of success are all factors to think about when choosing an investment. Here are some firms that I think are a good fit for you to consider. These are only examples and should not be followed. This checklist is meant to help you evaluate potential investments. If you decide to put money into any of these businesses, it should be because you've done your homework and determined that doing so will benefit your investment portfolio.

Global ePoint, Inc. (GEPT) creates and sells computer systems for businesses and factories, as well as digital audio and video surveillance equipment. The business is structured into the following departments: Aviation, contract manufacturing, and information technology Citibank, FedEx, GE Interlogix, Universal Studios, and American Airlines are just a few of Global's major clients. Global has also been a fairly newsworthy entity in recent weeks.

Additional fourth-quarter deliveries totaling $750,000 were granted to Global ePoint's aviation segment on October 28.

Global was awarded a contract with the Ukiah, California, Police Department on November 3, 2005.

Orders for $1.2 million in X-ray imaging processing hardware were placed with Global on November 7th, 2005.

Global's leadership has a solid track record, too. Toresa Lou, the company's current CEO, formerly held such a position at McDigit Company. She increased McDigit's annual revenue from zero to more than $400 million. Their share price fluctuated between $2.00 and $8.00 throughout the course of a year.

SEHO, the stock symbol for Sense Holdings, Inc. Explosive detection, human authentication and identification, and time and attendance systems are the company's bread and butter. Since July 1998, Sense Holdings has been serving the market.

They have recently won contracts to implement biometric solutions from two Fortune 100 firms.

The rights to sell and represent a U.S. patent exclusively were licensed to Sense Holdings. This patent covers the use of fingerprint readers to unlock and start a car. The patented biometrics can be employed in transportation systems like vehicles, boats, planes, and trains and include fingerprinting, voice recognition, facial recognition, and iris recognition.

The company's co-founder is still actively involved and serves as both its chief executive officer and president. The five people profiled below as key figures at Sense Holdings, Inc. all had distinguished track records before starting or joining the company. Their shares are somewhat distinct from Global's. The stock price ranged from a low of $.14 to a high of $.42 over the past 52 weeks. Some investors could be put off by the cheap price tag.

Incorporated in October of 2004, Sniffex, Inc.'s ticker symbol is SNFX. Their lone offering is a bomb detector that works at distances of up to 100 feet. It is so sensitive that it can detect explosives even through solid walls or metal containers. Its effectiveness would depend on factors like the time of day and the quantity of explosives utilized. This item is all they sell.

Their CEO is named Paul Johnson. He has served as CEO of more than seven different organizations. However, before Sniffex, Inc., all of them were primarily web-based technology businesses.

Of the three firms we've discussed so far, Sniffex is the one I'd be least confident in investing in. They're the youngest of the three businesses involved. They're led by someone who's very new to the field, and they sell just one product albeit a crucial one. As I write this, a share of their stock costs $1.65. The share price ranged from $.05 to $6.00 over the past 52 weeks.

In the course of my investigation for this post, I came across numerous organizations. The homeland security industry is filled with dozens of different companies. For obvious reasons, this sector of the economy is crucial. I have read "expert" opinions on various businesses, where they advise which businesses to invest in and which to avoid.

The company for which one of these suggestions was made does not yet sell any goods. Many patent approvals were still pending. The suggestion went on to elaborate on the consequences of granting the patents. I was thinking to myself when I read it, "This guy must own stock in this company." If the patents are accepted, this stock has the potential to be very profitable. 

However, I hope this essay has demonstrated that there are alternative businesses where you may make a similar investment with considerably less risk. In my opinion, there is a good opportunity for profitable investments if you look into this market. Just use your best judgment and make sure you're looking for the correct signs of accomplishment.