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.

April 15, 2011 - Greatbatch, Inc. (GB-NYSE) provides technology solutions for medical and industrial applications. The company operates in two segments, Greatbatch Medical and Electrochem Solutions.

The Electrochem Solutions segment provides technology solutions for critical industrial applications to various companies involved in energy, security, portable medical, and environmental monitoring markets. Products are cells, primary and rechargeable battery packs, and wireless sensors. This segment sells directly to end users; manufacturers, who incorporate these products into other devices for resale; and distributors. Greatbatch, Inc. sells primarily in the United States, Puerto Rico, the United Kingdom, Ireland, France, and Belgium. The company was founded in 1970 and is based in Clarence, New York.

Greatbatch escaped the recession mostly unscathed. While earnings in 2010 were down a penny from 2009 ($1.51 vs $1.52), analysts see growth starting again this year. Consensus estimate from 5 analysts is for $1.64 in 2011, then $1.82 in 2012. Next earnings will be out soon for the first quarter. Expect 39 cents a share compared to 32 cents a share in last year's first, an improvement of almost 22%.

Sales in the fourth quarter were up 6% from the same period in 2009 to $133.1 million. Analysts see the full year at $552.46 for 2011 vs $533.42 million in 2010. That's up 3.6%. They see another 4.4% increase for 2012 to $576.86 million. In the fourth quarter, improved sales came from the Orthopaedic and Vascular Access divisions. The Orthopaedic segment saw increased demand across all of its product offerings as the economy showed signs of recovery. Better revenues were also reported from the CRM and Neuromodulation group. But Electrochem registered a 17% decline in sales, a reflection of a drop in demand from large oil and gas customers that made significant purchases in the previous 2 quarters.

Earnings in the fourth period were up 15% to 46 cents, thanks to a mix of products that had higher margins and better productivity. Prices felt continued downward pressure, especially in the CRM and Neuromodulation products.

Expect continued growth. The products that Greatbatch make are critical for many operations. The demand will always be there. The Vascular Access division recently released new systems products that should increase sales 10% to 20% this year. If the economy continues to rebound, look for more Orthopaedic sales as many of these surgeries are elective. Further gains in revenues from the CRM and Neuromodulation group should be tempered with continued pricing pressure as OEM customers continue to demand more for less. Look for margins to improve as management has been focused on cost cutting.

GB's price has started to break out of a rather tight range which it's traded in for the last 2 years. It might be in anticipation of a growth in earnings. In 2004, the stock traded at $45 a share and earnings were only 84 cents. So investors have loved this one in the past. In fact with such a high institutional ownership, it's certain that many professionals do again.