Stocks Under $10 Weekly Summary

As we approached the fiscal cliff this week, the major U.S. stock market averages sold off. The Russell 2000, which serves as the benchmark for the model portfolio, has been down for five straight sessions. The index is now down 2% on the week, which is the level where we begin to look for buying opportunities. In the model portfolio, we would consider adding to our positions in Active Power ACPW, Ballantyne Strong (BTN) , Solta Medical (SLTM) and SunOpta (STKL) on the next market pullback.

Elsewhere, we're eyeing potential new names for the model portfolio, such as Wabash National (WNC) . The company makes truck trailers and is at a potential inflection point. We also have our eyes on Unilife (UNIS) ; which is a more speculative medical products maker and potential game-breaker stock.

As we prepare to greet 2013, we are pleased with the makeup of the model portfolio. The markets are closed for trading on Tuesday, but we'll still receive a lot of economic reports next week, culminating with the December jobs data on Friday.

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. There are currently no Three-rated names in the model portfolio.

ONES

Active Power (ACPW:Nasdaq; $3.25; 1,420 shares; 3.45% of the model portfolio; Game Breaker): Active Power's flywheel energy technology keeps its customers' mission-critical processes up and running. Its hardware also uses half as much space as existing technologies while generating twice as much power. The stock pulled back along with the broader markets this week, as the company executed its 1-for-5 reverse split. Despite the struggling share price, we believe that Active Power is carrying a lot of momentum into 2013. As the company nears profitability, we believe the stock can trade up toward the mid-single digits.

Ballantyne Strong (BTN:Amex; $3.28; 2,100 shares; 5.14%; Stealth Stock): The company distributes digital movie projectors and manufactures screens and lighting equipment for theaters. It was a quiet week for the shares, which ticked lower. We continue to believe that the stock will trade up toward its tangible book value of $4.70 a share in the first half of 2013.

Callidus Software (CALD:Nasdaq; $4.40; 1,500 shares; 4.93%; Stealth Stock): Callidus produces enterprise software for the management of sales staff, and the company's recent growth has come from its Software as a Service (SaaS) product offerings. The stock marked time this week on little news. As Callidus leverages its increased sales force in 2013, we maintain that the shares can move up toward $6. Depomed (DEPO:Nasdaq; $6.01; 550 shares; 2.47%; Game Breaker): The company markets specialty drugs around its oral drug delivery system, Acuform, which are used to treat Type 2 diabetes and post-shingles pain. The shares ticked higher this week, as Depomed defended its patents for Gralise against two potential generic competitors. As the company expands the Acuform brand, we believe the stock can trade up toward the high-single digits.

Kodiak Oil & Gas (KOG:NYSE; $8.55; 725 shares; 4.63%; Inflection Point): The company explores for oil and gas in the Williston Basin and Green River Basin. The stock fell 5% this week, even though crude oil prices moved higher. We maintain that Kodiak can deliver solid production growth over the coming quarters and that the shares are attractive to purchase below $8.50.

SandRidge Energy (SD:NYSE; $6.23; 850 shares; 3.95%; Inflection Point): The company explores for natural gas and oil in the U.S., primarily onshore. It was a volatile week for the shares, which ticked higher. As the few activist investors become more aggressive with SandRidge, we ultimately believe that it will help unlock value in the stock.

Solta Medical (SLTM:Nasdaq; $2.60; 2,850 shares; 5.53%; Stealth Stock): Solta produces medical devices for non-invasive treatments of wrinkles, acne, skin discoloration and fat reduction. It was a quiet week for the stock, which pulled back along with the broader market. The company's new products are on track to continue driving growth in 2013 and we believe that the shares can move up toward $4.

TriQuint Semiconductor (TQNT:Nasdaq; $4.74; 1,475 shares; 5.22%; Inflection Point): TriQuint produces integrated circuits for a wide range of industries, including wireless handsets and communications networks. The shares ticked lower on little news. The company should see margins improve in the new year and the stock remains attractive to purchase, at a 15% discount to tangible book value.

TWOS

Aceto (ACET:Nasdaq; $9.75; 450 shares; 3.28%; Stealth Stock): The company produces industrial chemicals used in the generic pharmaceutical and agricultural sectors. The stock ticked lower this week, along with the broader market. The company is positioned to continue growing along with the demand for generic drugs in 2013. In the meantime, the shares also sport a solid 2.2% dividend yield.

Cott (COT:NYSE; $7.90; 500 shares; 2.95%; Stealth Stock): Cott produces and distributes soft drinks, noncarbonated beverages and bottled water, primarily focusing on private-label items for major retailers. The shares pulled back 2% this week on little news. The company continues to operate in a strong pricing environment and the stock pays an attractive 3.1% dividend yield.

Graphic Packaging (GPK:NYSE; $6.26; 850 shares; 3.97%; Stealth Stock): The company produces paperboard packaging that is primarily used by food and beverage makers. It was a quiet week for the stock, which ticked higher. Graphic Packaging will likely continue to pay down debt with its strong cash flow in 2013 and we maintain that the shares can trade up through $7 in the coming months.

Health Management (HMA:NYSE; $8.96; 500 shares; 3.34%; Inflection Point): Health Management operates more than 50 general care hospitals that are located primarily in the southern U.S. The shares were hit with some profit-taking this week and pulled back along with the broader market. Trading at 10x expected full-year earnings, the company still holds value, and we believe the stock can move up into the double digits in the first half of 2013.

Huntington Bancshares (HBAN:Nasdaq; $6.28; 750 shares; 3.52%; Inflection Point): This Ohio-based bank operates more than 600 branches across six states. The stock ticked lower this week on little news. Even so, we believe the company can continue to gain market share from its larger peers in 2013. The shares also offer a 2.5% dividend yield.

Kopin (KOPN:Nasdaq; $3.15; 1,900 shares; 4.47%; Game Breaker): Kopin manufactures semiconductor wafers for wireless and fiber-optic equipment. It also makes small liquid-crystal display (LCD) screens that are used in a number of products, including consumer electronics and military night-vision gear. It was a quiet week for the shares, which lost 4%. Kopin remains leveraged to continued growth in demand for smartphones and tablets and, trading at just 2x cash, the stock is attractively valued.

Martha Stewart Living Omnimedia (MSO:NYSE; $2.41; 2,050 shares; 3.69%; Inflection Point): The company operates in the home goods segment, publishing magazines, producing broadcasts and licensing products to retailers. The stock dropped 5% this week on little news. Despite the recent turmoil in the executive suite, we believe that Martha Stewart's core licensing business can continue to drive growth in the first half of 2013.

NPS Pharmaceuticals (NPSP:Nasdaq; $8.98; 700 shares; 4.69%; Game Breaker): NPS is a biopharmaceutical company that develops specialty therapeutics for gastrointestinal and endocrine disorders. The shares pulled back this week, along with the broader market. Even so, the company's new drug, Gattex, should drive growth throughout 2013. We continue to believe the stock can trade up toward $12 in the coming quarters.

ON Semiconductor (ONNN:Nasdaq; $6.85; 400 shares; 2.05%; Stealth Stock): The company makes analog, standard logic and discrete semiconductors for use in data and power management. It was a quiet week for the stock, which ticked higher. Management is keeping a tight lid on costs and ON Semiconductor is leveraged to an eventual global economic recovery.

Stewart Enterprises (STEI:Nasdaq; $7.21; 500 shares; 2.69%; Stealth Stock): The company is a leading operator of funeral homes and cemeteries. The shares fell 5% this week on little news. That said, we believe Stewart can continue to outperform in a volatile market environment. The stock also offers a solid 2.2% dividend yield.

SunOpta (STKL:Nasdaq; $5.59; 700 shares; 2.92%; Stealth Stock): This producer of natural and organic food products also operates a joint venture that recycles industrial waste and makes cleaning products. The stock pulled back this week, along with the broader market. SunOpta offers growth at a reasonable price and we would consider adding to our position on the next market pullback.

Swift Transportation (SWFT:NYSE; $8.62; 550 shares; 3.54%; Inflection Point): Swift is a trucking company that transports goods throughout the U.S. and Mexico. The shares fell 5% this week on little news. That said, management can continue to expand margins and pay down debt in the first half of 2013. We believe the stock is attractive to buy on a 5% pullback from current levels.

Vantage Drilling (VTG:Amex; $1.79; 4,400 shares; 5.88%; Inflection Point): This offshore driller contracts its rigs for the exploration of oil and natural gas. The stock moved 3% higher this week, along with the underlying price of oil. The company's fleet is fully booked for 2013 and we believe the shares have 20% to 30% upside potential in the new year.

Yamana Gold (AUY:NYSE; $16.74; 250 shares; 3.12%; 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 shares ticked lower this week, along with the spot price of gold. Yamana can continue to deliver above-average production growth in the coming quarters and we believe the stock can move back up toward $20.

Zix (ZIXI:Nasdaq; $2.82; 2,000 shares; 4.21%; Stealth Stock): The company is a leading producer of email encryption software that enables doctors to automatically send information to pharmacies. The stock ticked higher this week on little news. Even so, Zix is carrying a lot of sales momentum into 2013 and we maintain that the shares have 20% to 30% upside potential from current levels.

*****************************************************

Introducing the all-new iPad app from TheStreet: Get fullcoverage of the markets and financial world, streaming HDvideo, and powerful technical analysis -- anytime, anywhere.Includes sophisticated charting and portfolio tracking toolsdelivered ultrafast in a sleek new interface. DownloadTheStreet iPad app now -- it's FREE!

http://itunes.apple.com/us/app/thestreet/id409122247?mt=8

*****************************************************

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

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

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

To view our Terms of Use click here:http://www.thestreet.com/static/about/terms-of-use.html

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

(c) 2012 TheStreet, Inc., 14 Wall Street, 15th Floor,New York, NY 10005, Attention: Customer Service Department