Stocks Under $10 Weekly Summary

Despite an upbeat unemployment report Friday, stocks closed near three-week lows. Oil prices touched a record $62.30 a barrel Monday. And after 15 months of great results, the apparel retailers fell a couple of percentage points in July as tough sales comparisons, coupled with higher oil prices, may finally be taking their toll on consumer spending habits.

When the dust settled, the Dow lost 0.78%, the Nasdaq gave back 0.32%, and the S&P 500 finished 0.63% lower.

It was an eventful week for the model portfolio. On Monday, Symbol Technologies (SBL) announced second-quarter results that met previously lowered expectations and also said CEO Bill Nuti is leaving the company to take the head job at NCR (NCR) . Shares fell sharply as the company's third-quarter revenue guidance fell short of Street expectations. We will continue to monitor the situation closely.

Then, on Tuesday, we sold 300 shares of our 900-share position in Calpine (CPN) for a 9% gain. The stock was running ahead of the company's Wednesday earnings release, and we wanted to book some gains ahead of the results. Our sales proved quite prescient as Calpine's second-quarter earnings came in well below Wall Street expectations. We sold our final 600 shares for a 1.47% loss Thursday.

Our stocks had a mixed day Wednesday. Medical diagnostic play OraSure (OSUR) blew out second-quarter earnings results and raised full-year guidance. Its shares jumped some 15% on the good news. But PlanetOut.com (LGBT) announced dismal results and shares plummeted from about $10 a share into the low $8 range. We exited our position for a 6.2% loss later that morning.

Also on Wednesday, we initiated a 1,500-share position in Capstone Turbine (CPST) . The company, which makes power-generating turbines for office buildings and medical facilities, is positioned to benefit from turbine tax incentives in the congressional energy bill and from its recently announced partnership with natural gas utility KeySpan KSE. We believe shares can double as more investors catch on to this Game Breaker.

Finally, on Friday, Magna MECA reported second-quarter results. With very little analyst coverage, it is hard to gauge how the numbers were relative to expectations. But we own Magna as a play on the eventual rollout of slot machines at the racetracks the company owns and operates, and because we believe shareholder value will be created through strategic asset sales.

Heading into next week, we have SunOpta (STKL) announcing earnings results Monday. Lions Gate (LGF) and OpenTV (OPTV) will deliver results on Tuesday. And Capstone Turbine will report its second-quarter results Wednesday. We will update readers as the numbers roll in.

Now let's take a look at the portfolio and some of the moves we made this week. One quick note: Ones are stocks we would buy now, while Twos are stocks we would buy only on a pullback from current levels. And as a reminder:

-- A Game Breaker is going to change the landscape of an industry, as Intel, Microsoft and Wal-Mart did in their sectors. Investors can make big money in these stocks by getting in before the crowd.

-- Inflection Point stocks have a broken business model that's on the mend but has yet to be recognized by the market. Investors who recognize a turnaround early can pocket strong returns.

-- Stealth Stocks are often unknown names to the general public, but can be hugely profitable investments, especially when they score well in the Alpha component of our proprietary rating system.

-- The Alpha component has certain characteristics -- such as a small analyst following and float, among others -- that increase the potential for large percentage moves on news and events.

ONES

Candela (CLZR:Nasdaq, $10.55, 300 shares, 3.41%, Stealth Stock): Candela manufactures and distributes lasers and other cosmetic surgery technology to surgeons and doctors. Competitor Cutera (CUTR) announced very strong earnings results Tuesday, and we believe this is a good leading indicator for solid results from Candela when it reports earnings later this month. With that in mind, we are going move the stock back to a One rating this week. New readers should look to initiate a position ahead of the company's Aug. 24 earnings release.

Capstone Turbine (CPST:Nasdaq, $2.66, 1,500 shares, 4.30%, Game Breaker): Capstone's microturbines enable customers like medical facilities and small businesses to capitalize on an environmentally friendly power source that is also cost-effective. We initiated a 1,500-share position Wednesday and believe shares have 100% upside from the current quote in the coming 12 months. The company stands to benefit from the energy bill that recently passed both the U.S. Senate and House of Representatives due to its incentives for microturbine-generated power. Additionally, Capstone's recently announced partnership with natural gas powerhouse KeySpan KSE should open the company up to a large market of potential customers. Capstone recently provided guidance for revenue to nearly double in fiscal 2006 to $35 million, but we expect the energy bill and KeySpan deal to provide plenty of upside to this number when the company reports earnings on August 10. We would initiate a position at the current price if we didn't already own shares.

Lions Gate (LGF:NYSE, $10.20, 500 shares, 5.50%, Game Breaker): Lions Gate is a leading independent movie production company known for low-budget movies that generate significant returns. The company is set to report fiscal first-quarter earnings results Tuesday. The Street is looking for revenue of $160 million, EBITDA of $15 million, and a profit of about 6 to 7 cents a share. We expect the company to deliver solid results thanks to strong box office results for "Crash" and a lower-than-expected investment in film libraries. We will provide an update after the company reports, but have a full position at the current quote and will only add on a pullback under $9.50 a share. That said, we view the current quote as an attractive entry point for readers.

Magna Entertainment (MECA:Nasdaq, $6.71, 500 shares, 3.62%, Game Breaker): Magna is the largest operator of horse racetracks in the U.S. There were some potentially significant legislative developments in Florida on Tuesday when Governor Jeb Bush said he may call a special session this year to discuss the plan to allow slot machines to be placed at Broward and Miami-Dade county racetracks. Magna's Gulfstream Park stands to benefit from any positive developments on this front. In other news, the company announced second-quarter earnings results on Friday. The results included revenue of $176 million, down about 11% year over year, and a net loss of 25 cents a share, a penny worse than the year-ago period. That said, we own Magna as a play on its valuable real estate and the potential for slot machine installations at some of its larger racetracks. That thesis remains intact, and we maintain our One rating this week. Microtune (TUNE:Nasdaq, $6.12, 700 shares, 4.62%, Stealth Stock): Microtune's chips act as tuners in cable television boxes. On Monday, the company announced it shipped its 20-millionth single-chip silicon tuner, confirming the company's strong leadership position in the industry. We believe Microtune will benefit from increased demand for set-top boxes, cable modems and, eventually, portable digital televisions. With that in mind, we continue to recommend purchase of shares at the current quote for readers with a three-month to 12-month time horizon.

Online Resources (ORCC:Nasdaq, $10.05, 400 shares, 4.34%, Stealth Stock): Online Resources is a payment-services company that enables small and midsized financial institutions to offer online banking to their clients. There is nothing newsworthy to report this week. We continue to like Online Resources' positioning to benefit from increased consumer adoption of online banking and payment-services solutions. The company's core customer base of small and midsized financial institutions is rapidly rolling out next-generation technology to lure customers away from larger financial institutions that tend to compete more effectively on price. We expect shares to trade higher in the coming months as investors digest the most recently reported quarterly results -- which we believe were very solid. With that in mind, we reiterate our One rating this week and believe readers should accumulate shares at the current quote.

RightNow Technologies (RNOW:Nasdaq, $11.31, 600 shares, 7.32%, Stealth Stock): RightNow is an emerging company in the customer relationship management (CRM) space. It was a quiet week for RightNow, save for some insider selling, and shares moved higher by 0.4%. We continue to rate RightNow a One this week because we see no evidence of slowing demand for the hosted CRM software it sells. We also believe investors overreacted to last week's earnings results -- the company lowered its full-year cash flow estimates by 18% -- and caused the stock to lose 20% in early trading. The cash flow reduction was a reflection of customer licensing preference that affects the timing of revenue recognition, and not a slowdown in top-line or bookings growth. We view the stock as a good buy at the current quote. Skyworks (SWKS:Nasdaq, $6.95, 500 shares, 3.75%, Inflection Point): Skyworks is a leading manufacturer of cell-phone components. Shave have pulled back 18% since the company reported in-line fiscal third-quarter earnings in late July and provided slightly lower-than-expected forward sales and earnings guidance. We aren't surprised by the stock's decline, but believe the pullback has finally created an attractive entry point for new readers. That's because Skyworks is positioned to benefit from a ramp up in cell-phone handset demand in the second half of this year that should help it beat its somewhat conservative guidance. With that in mind, we are moving the stock back to a One rating this week.

SunOpta (STKL:Nasdaq, $5.71, 900 shares, 5.54%, Stealth Stock): SunOpta is a leading soy and organic ingredients producer and distributor. The company will report earnings Monday and host a conference call Tuesday. The Street is looking for a 7-cent profit on sales of $101 million. We believe there could be upside to these estimates because of the recent solid earnings results from organic foods retailer Whole Foods WFMI, which indicate that end-market demand for these products remains quite strong. As such, we are rating shares a One this week ahead of next week's results.

Vasco Data Security International (VDSI:Nasdaq, $10.91, 400 shares, 4.71%, Stealth Stock): Vasco's technology enables secure online financial and other transactions. The recent surge in identity theft, mainly among financial institutions such as Bank of America (BAC) and Citigroup (C) , makes Vasco a compelling holding at the current quote. That's because the company has a proven track record of generating meaningful sequential revenue gains, and its partnership with industry giant VeriSign (VRSN) should help support the stock's somewhat lofty valuation going forward. We would buy shares at the current quote if we didn't already have a sizable stake at a lower price.

TWOS

Allscripts (MDRX:Nasdaq, $16.79, 200 shares, 3.62%, Game Breaker): Allscripts makes software that allows physicians to write prescriptions, order tests, see results and check drug interactions using wireless personal digital assistants (PDAs). There wasn't anything company-specific to report this week, but competitor Quality Systems QSII delivered solid second-quarter earnings results Wednesday. This confirmed our view that end-market demand for electronic health records remains strong. Allscripts' solid competitive positioning in this space should bode well for its results in the coming 12 months. We will wait for a pullback below $15 a share before adding to our stake because we already have a 49% gain at the current quote. As such, we are maintaining our Two rating this week.

Evergreen Solar (ESLR:Nasdaq, $6.23, 400 shares, 2.69%, Stealth Stock): Evergreen Solar is a leader in developing solar power cells and panels. Its system, called String Ribbon, gives Evergreen a competitive advantage by lowering the need for high-cost silicon. The company announced a second-quarter net loss of 7 cents a share and revenue of $10.7 million Tuesday. The bottom-line number was a penny shy of analyst forecasts while the top line was about 7% ahead of forecasts. That said, the company reiterated its construction plans for its German solar power plant with partner Q-Cells on its conference call, and that means profitability is still on pace to be reached by the second half of 2006 when the plant is up and running. We believe investors should wait for a pullback closer to $6 a share before making purchases.

Imax (IMAX:Nasdaq, $10.75, 200 shares, 2.32%, Game Breaker): The company has undergone a technological transformation over the past two years that should allow it to participate in more blockbuster movie releases and increase the number of Imax-compatible theaters worldwide. The company topped analyst expectations for the second quarter with a 3-cent profit on $30.88 million in sales. Strength in the quarter came from strong box office sales for "Batman Begins" and a ramp up in Imax-compatible theaters. The company maintained its full-year EPS guidance of 35 cents to 38 cents and revenue guidance of $145 million to $150 million, largely due to higher theater-installation expenses in the second half of the year. That said, these costs should yield nice gains in 2006 as the company now expects to reach the high end of its projected 40 to 45 new theater deals by year-end. We will wait for a dip closer to $9 a share before adding to our small position.

Informatica (INFA:Nasdaq, $10.35, 200 shares, 2.23%, Stealth Stock): Informatica is the leading stand-alone extract, transform and load (ETL) integration software company. Following the company's rock-solid second-quarter earnings results July 21 and 20% gain in stock value that day, shares have traded pretty flat. That said, we believe investors will continue to accumulate shares as we near the end of the second quarter, given the company's recent strong financial performance. We are still waiting for about a 5% pullback from the current quote to buy back the shares we sold closer to $11. As such, we maintain our Two rating this week.

OpenTV (OPTV:Nasdaq, $3.07, 1,500 shares, 4.97%, Stealth Stock): OpenTV is the leader in interactive television, and its technology is now in more than 55 million set-top boxes worldwide. The company is set to report earnings Tuesday. Analysts are looking for revenue of $22.2 million and a net loss of 2 to 3 cents a share. We believe the company had a decent quarter based on total demand for video services in the U.S. and abroad. Given the stock's 9.1% run in the past two weeks, we believe the company will have to deliver a solid report for shares to remain above $3. With that in mind, we are maintaining our Two rating this week. As always, we will provide subscribers with our take on the earnings results as they become available.

OraSure (OSUR:Nasdaq, $10.98, 500 shares, 5.92%, Stealth Stock): OraSure is a leading provider of rapid HIV tests in the U.S., and has a global presence in the over-the-counter wart removal market. The company reported one of the best quarters in its history Tuesday. In the second quarter, OraSure had sales of $17.4 million and EPS of 6 cents vs. analyst expectations for sales of $16.6 million and EPS of 2 cents. Strength was driven by an 89% year-over-year increase in sales of its infections disease testing products, and 48% annual growth in sales in its substance abuse testing products. Additionally, the company raised its full-year EPS guidance to 14 to 16 cents, from 12 to 14 cents, topping Street estimates for a 13-cent profit. OraSure's future is bright, but the stock is now 16% above our cost basis, and we would wait for a dip below $10 a share to add to our stake. That makes OraSure a Two rating this week.

Quantum Fuel Systems (QTWW:Nasdaq, $4.19, 600 shares, 2.71%, Game Breaker): Quantum is a leader in the alternative fuel industry. Shares traded lower this week despite news that General Motors (GM) , Honda (HMC:NYSE ADR) and BMW would be teaming up to develop new technologies for hydrogen fuel-cell vehicles. Because General Motors has a 6% stake in Quantum and is a large customer, we believe this news is a positive for Quantum's technology and could serve as a catalyst for business down the road. We are unlikely to see hydrogen fuel-cell vehicles on the road anytime soon, but this news implies that more positive news for Quantum is on the way. We will wait for the stock to drop below $4 a share before adding to our position.

Sirius Satellite (SIRI:Nasdaq, $6.76, 850 shares, 6.20%, Game Breaker): Sirius is a leading provider of satellite radio in the U.S. The company announced second-quarter operating results Tuesday. Net subscriber additions of 365,000, a subscriber-acquisition cost of $160 for each new sub, and EBITDA results all surpassed Street expectations. In addition, the company boosted its full-year subscriber estimate to 3 million from previous expectations for 2.7 million. We believe announcements on the company's conference call regarding success ramping up automotive factory installation, new product launches later this year, and continued expansion of marketing for the January 2006 Howard Stern launch on Satellite radio bode well for Sirius in the coming quarters. We will wait for the stock to fall below $6.25 a share before increasing our stake.

Symbol Technologies (SBL:NYSE, $9.41, 500 shares, 5.08%, Inflection Point): Symbol is a leading supply-chain management technology company. The company announced its second-quarter earnings results Monday. Its 2-cent profit, on sales of $427.8 million, was largely in line with expectations. Recall that management already cut its second-quarter outlook twice, so the in-line results weren't much of a surprise. What was a surprise, however, was CEO Bill Nuti's announced departure to take over the head job at NCR (NCR) . But we are glad to see Nuti leave, given his dismal performance record. Given Symbol's poor sales execution, troubling comments about lower customer demand on the company's conference call, recent spike in debt, and potential for a cash crunch if sales growth continues to decline, we are maintaining our Two rating this week. We will continue to monitor the situation closely.

Tibco (TIBX:Nasdaq, $7.18, 500 shares, 3.87%, Game Breaker): Tibco, a leader in integration software, finished the week down 6.6%. We believe Tibco shares will remain range-bound in the near term because of the company's two earnings disappointments in 2005, the latest coming at the end of June. With that in mind, we would be compelled to use any strength above $8 a share as a chance to lock in a 12.5% gain. As such, we are maintaining our Two rating this week.

Topps (TOPP:Nasdaq, $10.10, 300 shares, 3.27%, Stealth Stock): The Topps brand is recognized as a premier name in sports trading cards, and its confectionary business produces such products as Push Pops and Ring Pops. Topps traded sideways this week, and there is nothing new to report. That said, we continue to believe the Topps brand has more value than current management has been able to extract. As such, we continue to await news of progress on strategic alternatives, such as a restructuring or outright sale of the company. But our limited visibility into this process forces us to continue to rate shares a Two this week.

David Peltier and William Gabrielski, writers ofTheStreet.com Stocks Under $10, are research associatesat TheStreet.com.

Mr. Peltier is a contributor to TheStreet.com Dividend Stock Advisor and maintains the model portfolio for that product.

TheStreet.com is a publisher and a registered investment adviser. TheStreet.com Stocks Under $10 contains the authors' own opinions, and none of the information contained therein constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. You further understand that Messrs. Peltier and Gabrielski will not advise you personally concerning the nature, potential, value or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. To the extent any of the information contained in TheStreet.com Stocks Under $10 may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.

Past results are not necessarily indicative of futureperformance. Investing in the stocks chosen forTheStreet.com Stocks Under $10 model portfolio is riskyand speculative. The companies may have limited operatinghistories and little available public information, and thestocks they issue may be volatile and illiquid. Trading insuch securities can result in immediate and substantial losses of the capital invested. You should use only risk capital, and not capital required for other purposes, such as retirement savings, student loans, mortgages or education. As editorial employees of TheStreet.com, Mr. Peltier and Mr. Gabrielski are restricted from owning individual securities other than stock or options in TheStreet.com, Inc.

-----------------------------------------------------------Visit the TheStreet.com Stocks Under $10 site (available to subscribers ONLY) by clicking here: http://www.thestreet.com/k/su/index.html

To view TheStreet.com Stocks Under $10 portfolio on theWeb, click here:http://www.thestreet.com/k/su/portfolio.html

For customer service on your account please visit:https://secure2.thestreet.com/cap/selfserve/

-----------------------------------------------------------

(c) 2005 TheStreet.com, Inc., 14 Wall Street, 15th Floor,New York, NY 10005, Attention: Customer Service Department