Stocks Under $10 Weekly Summary

There was an ominous start to the trading week, as Standard & Poors lowered its credit outlook on U.S. government debt to negative. That said, stocks ultimately rebounded to snap a two-week losing streak, as solid earnings from the technology sector piqued investors' interest. As a reminder, U.S. the markets will be closed tomorrow for the Good Friday holiday.

It was a relatively quiet week on the economic front, though initial jobless claims did come in above 400,000 for a second straight week. Looking ahead to next week, we'll get the March durable goods orders report, as well as an interest rate decision from the Federal Open Market Committee (FOMC) on Wednesday. Thursday brings the next look at initial jobless claims, as well as the first read on the first-quarter, gross domestic product.

Health Management (HMA) kicks off earnings season for the model portfolio after the close of trading on Monday, April 25. As a reminder, we provide readers with a full earnings preview for each company in the model portfolio, including what to listen for on the conference call. When the call is finished, we also send out a review of the earnings results and forward guidance.

Here is a list of the companies in the model portfolio that have confirmed earnings report dates for this quarter:

April 25: Health Management (HMA) .

April 26: Zix (ZIXI) .

April 27: Martha Stewart (MSO) , TriQuint Semiconductor (TQNT) .

April 28: Kopin (KOPN) , Metalico (MEA) and Openwave Systems (OPWV) .

May 3: Yamana Gold (AUY) .

May 4: Cott (COT) and Ista Pharmaceuticals (ISTA) .

May 10: Wendy's/Arby's (WEN) .

May 11: SunOpta (STKL) .

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 have yet to be recognized by the market. Investors who recognize a turnaround early can pocket strong returns.

-- Stealth Stocks are often names unknown to the general public, but can be hugely profitable investments, especially when they have catalysts to boost their share prices.

Also, Ones are stocks that we would buy at their current quotes, Twos are stocks that we would buy on a pullback and Threes are names that we would sell into strength.

ONES

Aceto (ACET:Nasdaq; $7.79; 900 shares; 4.31% of the model portfolio; Stealth Stock): The company produces industrial chemicals used in the generic pharmaceuticals and agriculture sectors. It was a quiet week for the shares, which ticked lower. We maintain that Aceto has multiple, potential avenues of growth in 2011. In addition, the stock sports an attractive 2.6% dividend yield.

Ballantyne Strong (BTN:Amex; $6.55; 850 shares; 3.42%; Stealth Stock): The company distributes digital movie projectors and manufactures screens and lighting equipment for theaters. The stock pulled back 4% this week on little news. Even so, Ballantyne is leveraged to rising demand for its products both in the U.S. and in China. With that in mind, we would look to buy another 150 shares for the model portfolio below $6.50.

Kopin (KOPN:Nasdaq; $4.50; 1,950 shares; 5.40%; Game Breaker): Kopin manufactures semiconductor wafers for wireless and fiber-optic equipment. The company also makes small, liquid crystal display (LCD) screens that are used in a number of products, including consumer electronics and military night-vision gear. Shares rebounded along with the broader market this week. Kopin is scheduled to announce its first-quarter results on the morning of April 28. We will provide a full preview for readers early next week, but expect the company to deliver solid numbers. In the meantime, Kopin's pristine balance sheet should help reduce downside potential for the stock.

Lime Energy (LIME:Nasdaq; $4.62; 1,750 shares; 4.97%; Game Breaker): This energy-efficiency consultant serves commercial, utility and government customers with its lighting, ventilating and water systems. It was a quiet week for the stock, which ticked lower. That said, Lime Energy is carrying a lot of momentum into 2011. As a result, we would consider adding to our position on the next market pullback.

Martha Stewart Living Omnimedia (MSO:NYSE; $3.86; 1,900 shares; 4.51%; Inflection Point): The company operates in the home goods segment, publishing magazines, producing broadcasts and licensing products to retailers and it remains leveraged to an improving advertising market. Shares gained 2% this week, ahead of Martha Stewart's quarterly report, which is scheduled for Wednesday morning. We expect strong results from the company, as its flagship magazine posted solid advertising growth in each of the first three months of the year. If management can execute on its plans, we continue to believe that the stock can move up toward the mid-single digits.

Omnova Solutions (OMN:NYSE; $8.28; 900 shares; 4.58%; Stealth Stock): Omnova produces specialty chemicals for paper and textile makers. The company also makes vinyl- and paper-based wall coverings and laminates. The stock rebounded 3% this week on little news. Omnova is seeing better pricing power and should be able to keep up with rising input costs. With that in mind, we maintain that shares can trade up toward $10 in the coming quarters.

Openwave Systems (OPWV:Nasdaq; $2.08; 3,400 shares; 4.35%; Stealth Stock): Openwave produces software that makes communications networks more efficient. The company recently released new products that are designed to help wireless networks meet increasing data demand. Shares rebounded this week, ahead of Openwave's upcoming quarterly report, which is slated for April 28. The company already preannounced solid orders for the fiscal, third-quarter 2010 (ended March) earlier this month. In the meantime, Openwave's strong cash position should help limit downside potential in the stock.

Stein Mart (SMRT:Nasdaq; $10.48; 700 shares; 4.51%; Inflection Point): Stein Mart is a discount retailer with 265 stores across 30 states. The stock ticked lower this week, touching a fresh, 52-week high on Thursday. Even so, as the company continues to drive store traffic with its improved merchandising, we believe that the shares can ultimately move up toward the low teens.

Stereotaxis (STXS:Nasdaq; $3.80; 2,300 shares; 5.37%; Game Breaker): The company's main product is the Niobe system, a remote-controlled, cardiology instrument system that aids in the treatment of atrial fibrillation (AF) through the use of catheters. Shares were hit with some profit-taking this week and lost 4%. That said, we believe Stereotaxis can deliver above-average sales growth in the upcoming quarters, driven by overseas expansion. As a result, the stock could trade back up toward the mid-single digits in the coming quarters.

Stewart Enterprises (STEI:Nasdaq; $8.17; 600 shares; 3.01%; Stealth Stock): The company is a leading operator of funeral homes and cemeteries. The stock digested its recent gains this week, as Stewart completed its $200 million debt refinancing. Management returns most of the company's consistent cash flow back to investors, and we maintain that shares can outperform the broader market in this volatile trading environment.

SunOpta (STKL:Nasdaq; $7.15; 1,000 shares; 4.40%; Stealth Stock): This producer of natural and organic food products also operates a joint venture that recycles industrial waste and makes cleaning products. Shares traded slightly lower this week, trailing the broader market. SunOpta is scheduled to report its first-quarter results on May 11, and we continue to believe that the stock offers investors growth at a reasonable price.

Vantage Drilling (VTG:Amex; $1.85; 4,000 shares; 4.55%; Inflection Point): This offshore driller contracts its rigs for the exploration of oil and natural gas. The stock fell 2% this week and remains attractive to purchase at current levels. Vantage's largest shareholder resigned from its board of directors this week, which should help allay some investors' fears about the balance of power at the company. In the meantime, management remains on track to more than double its earnings before interest, taxes, depreciation and amortization (EBITDA) in 2011.

TWOS

Cott (COT:NYSE; $8.61; 650 shares; 3.44%; Stealth Stock): Cott produces and distributes soft drinks, noncarbonated beverages and bottled water, primarily focusing on private-label items for major retailers. Shares ticked higher this week, as the company scheduled its annual investor meeting and first-quarter earnings report for the first week of May. We'll get a better look into the beverage industry next week when Coca-Cola (KO) and Pepsi (PEP) post their own quarterly earnings results. In the meantime, we maintain that the stock can move up toward the double-digits during the coming quarters.

Health Management (HMA:NYSE; $10.31; 550 shares; 3.49%; Inflection Point): Health Management operates more than 50 general care hospitals, which are located primarily in the southern U.S. The stock ticked lower this week. The company said on Monday that it is entering into a joint-venture with a 123-bed hospital in Mississippi. Management has a solid track record of making similar deals, which have helped to boost Health Management's earnings. The company kicks off earnings season for the model portfolio on Monday morning, and shares remain attractively valued ahead of the numbers.

Metalico (MEA:Amex; $5.61; 1,150 shares; 3.97%; Stealth Stock): Metalico recycles scrap metals, including steel, iron and aluminum. The company also manufactures lead products. Shares traded higher this week, ahead of Metalico's quarterly report, which is set for April 28. We expect a solid report from the company, given the improving pricing and demand in the scrap metals market. With this in mind, we believe the stock can trade back up toward $7 in the coming months.

ON Semiconductor (ONNN:Nasdaq; $9.95; 650 shares; 3.98%; Stealth Stock): The company makes analog, standard logic and discrete semiconductors for use in data and power management. The stock rebounded more than 3% this week, after Intel (INTC) delivered strong first-quarter results on Tuesday. While not all chip stocks are created equal, we believe that ON Semiconductor is already pricing in any potential supply delays caused by the tragedy in Japan.

Standard Motor Products (SMP:NYSE; $13.42; 600 shares; 4.95%; Inflection Point): Standard Motor manufactures after-market automotive parts for air conditioning systems and engines. It was a quiet week for the shares, which rebounded 4%. The company remains inexpensive at current levels, trading at less than 11x earnings and offering a 2.1% dividend yield.

TriQuint Semiconductor (TQNT:Nasdaq; $12.72; 450 shares; 3.52%; Inflection Point): TriQuint produces integrated circuits for a wide range of industries, including wireless handsets and communications networks. The stock surged over 7% this week, as Intel led the chip sector higher. TriQuint is scheduled to post its own first-quarter results after the close of trading on April 27, and we expect another solid showing from management. We continue to believe that shares can move back up toward the mid-teens during the coming months.

Wendy's/Arby's (WEN:NYSE; $4.68; 700 shares, 2.01%; Inflection Point): The company operates more than 10,000 quick-service restaurant locations in the U.S. and more than 20 other countries under its two namesake brands, Wendy's and Arby's. Shares fell about 3% this week, ahead of Wendy's/Arby's upcoming quarterly report, which is scheduled for May 10. The company remains in the midst of a turnaround, and the stock is attractive to hold at current levels.

Yamana Gold (AUY:NYSE; $12.77; 500 shares; 3.93%; Inflection Point): Yamana is a gold and copper exploration company with seven operating mines and several ongoing development projects in Brazil, Argentina and Chile. The stock ticked lower this week, as underlying gold prices continued to push into new record levels. Yamana should post above-average production growth during the next couple of quarters, and we continue to believe that shares can move up toward the mid-teens.

Zix (ZIXI:Nasdaq; $3.78; 1,750 shares; 4.07%; Stealth Stock): This leading producer of email encryption software is in the process of closing its unprofitable e-prescribing division, which allows doctors to automatically send information to pharmacies. Shares gained 5% this week, ahead of the company's earnings report on Tuesday. According to a brief posting on its website, Zix was rumored to be possibly partnering with Microsoft (MSFT) . We expect to get more details on the conference call next week, but the stock remains attractively valued ahead of the quarter.

THREES

Ista Pharmaceuticals (ISTA:Nasdaq; $9.97; 500 shares; 3.06%; Stealth Stock): The company produces specialty pharmaceuticals that treat eye conditions. The stock was little changed this week ahead of Ista's upcoming quarterly report, which is set for May 4. We would consider buying back 100 shares (which we recently sold at higher levels) if shares fall below $9 in the near term.

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