This column is for investors willing to take more risk and potentially receive more reward.  The stocks mentioned in this column are not recommended to buy or sell.  They're brought to your attention so you can investigate them further to determine if they fit your risk profile.  Most of the stocks will have less than $1 billion of market capitalization, have more volatility than other stocks, and oftentimes no earnings.  And some will have tremendous stories.

March 20, 2009 - Balchem Corp. (BCPC-NASDAQ) provides specialty performance ingredients and products for the food, nutritional, feed, pharmaceutical, and medical sterilization industries worldwide.

The ARC Specialty Products segment repackages and distributes ethyleneoxide to contract sterilizers, medical device manufacturers, and medical gas distributors; sells single use canisters of 100% ethyleneoxide for use in medical device sterilization; propylene oxide for using as fumigation in spice treatment and in various chemical synthesis applications, as well as in industrial applications to make paints durable and for manufacturing specialty starches and textile coatings; and methyl chloride for using as a raw material in specialty herbicides, fertilizers, and pharmaceuticals, as well as in malt and wine preservers.

The BCP Ingredients segment manufactures and supplies choline chloride to the poultry and swine industries; manufactures certain derivatives of choline chloride for industrial applications; and produces and sells methylamines for the manufacture of choline products. Balchem sells its products through its own sales force, independent distributors, and sales agents. The company was founded in1967 and is headquartered in New Hampton, New York.

What caught my eye about this stock was the stock price chart. The stock has been steadily climbing since 2000 when it was at a low of $2.07 a share. Last year it hit an all-time high of $30.31 a share. Now it's fallen back, but it held up very well in the October/November crash that took almost all other stocks down hard. This one seems worth some time.

Over the last 5 years, sales had an average annual growth of 18% while earnings increased by 17% annually. From 2006 to 2007, sales rocketed by 72% and earnings were up by 30%. Beginning in 2005, earnings per share were 61 cents, then 67 cents, followed by 87 cents, then hit $1.00. Analysts expect $1.17 this year and $1.34 next year.

Earnings were released on Feb 24 for the fourth quarter. Sales came in at $54.1 million (compared to $53.7 million in the same quarter last year). Earnings were 26 cents a share vs 23 cents last year, up 13%. Both represented records for the company.

Commenting on the results, Dino A. Rossi, Chairman, President and CEO of Balchem said, ``This record fourth quarter, combined with strong performances across Balchem's business in the first nine months of the year, despite the well publicized difficult economic conditions, continues to demonstratethe value of our diversified business. Our prior year strategic acquisitions, with improved cross business integration, have increased our global presence; thereby off-setting softness in some U.S. markets. Raw material costs have had continued negative impact on certain segments, but we have begun experiencing relief on certain key raw materials. We will continue to closely monitor key economic drivers, stay customer focused, and take appropriate actions to improve operating margins and cash flow."

He added: "Year over year, we expect improved results in the Food, Pharma & Nutrition segment, particularly in the choline, calcium, domestic and international food products. The Animal Nutrition & Health segment realized some margin relief in the quarter, despite supply chain interruptions, that now appear to be behind us. Nevertheless, many end specie producers continue to have financial issues, so our focus on successful new product launches and continued production efficiencies are critical. The ARC Specialty Products segment continues its steady revenue growth and solid profit results with improved volumes and some price increases, as we continue to develop new market opportunities for specialized delivery of certain gases. There certainly is considerable volatility in the global economy, but we expect 2009 to be a year of improvements in sales and earnings, as we continue to implement lean programs, de-bottleneck production capabilities, and leverage our existing business and research infrastructure.Our healthy financial situation has us positioned to capitalize on opportunities that will likely arise from the current economic environment.``

The institutions have been increasing their holdings of BCPC. In the first quarter of 2008, 28 bought the stock and 36 sold it. In the second quarter, 51 bought it while 37 sold. Then in the 3rd quarter, 64 bought and 46 sold. Now they own 72% of the stock while insiders own only .71%. there are 18.3 million shares outstanding and a float of 18.06 million.

More numbers: Price to Sales is 1.76 whle Price to Book is 3.56. Operating margin for the last 12 months was 12.65% and Profit Margin was 8.21%. Return on Assets was 11.88% and Return on Equity was a strong 18.4%. Total cash is $3.42 million while total debt is $11.57 million. Current ratio is 2.15. Book Value is $6.28. Beta is .7. There is a one-time dividend of 11 cents for this year, payable in the first quarter.

Check out Balchem. It seems to be an up and coming stock with a solid record of strong investor support. The stock price has been enviable, with very few downward movements. In fact, the most recent slide from $30 a share to a 52-week low of $18.72 has been the steepest in a decade. Now it's recovering again. Will it get back to $30 and keep going? Only time will tell.

Company Web site: www.balchem.com

- Ted Allrich