With all the doom and gloom in the news these days, you might be surprised to find out that some small stocks have done extremely well in the first month of 2009. Below is a list of the top penny stock performers during the month of January. The screen used to find these stocks was limited to the major exchanges, and as you can tell, the NASDAQ nearly swept the whole contest:

So, other than the NASDAQ dominance, is there anything in common amongst these stocks? Well, you’ll find a lot of medical and technological stocks in this bunch.  Below are some brief descriptions of each company…

ICOP Digital, Inc (NASDAQ: ICOP) engineers, produces and markets mobile and stationary surveillance solutions for law enforcement. ICOP shares started the year at 16 cents and have quickly risen to $1 over the past few weeks.

Targanta Therapeutics Corp (NASDAQ: TARG) is a biopharmaceutical company focused on the development and commercialization of antibiotics for infections treated or acquired in hospitals and other institutional settings. The Medicines Company (NASDAQ: MDCO) recently announced that it would acquire 100% of Targanta’s outstanding shares. This news helped launch the stock from 61 cents to $2.50.

Zoom Technologies, Inc (NASDAQ: ZOOM) designs, produces, sells, and supports broadband and dial-up modems, voice over Internet protocol (VoIP) products and services, and Bluetooth wireless products.

Grill Concepts, Inc (NASDAQ: GRIL) develops, owns, operates, manages and licenses full-service upscale casual dining restaurants under the name Daily Grill and fine dining restaurants under the name The Grill on the Alley. With a market cap of only $6.8 million, GRIL shares have spiked from 24 cents to 77 cents over the past month.

North American Scientific, Inc (NASDAQ: NASM) designs, develops, produces and sells products for radiation therapy treatment, primarily in the treatment of prostate cancer. The recent jump in NASM shares has helped the company regain compliance with the NASDAQ Capital Market listing regulations.

California Coastal Communities (NASDAQ: CALC) is a residential land development and homebuilding company with properties owned or controlled primarily in Orange County, California, and also in four other Southern California counties. On Jan 2, the company sold 17 model homes for $25 million. The news helped push their stock from 56 cents to above $1.

Anadys Pharmaceuticals, Inc (NASDAQ: ANDS) is a biopharmaceutical company focused to develop medicines in the areas of hepatitis C and oncology. Due to some positive news on a recent drug study, shares of ANDS have risen from $1.81 to $5.

Quantum Group, Inc (AMEX: QGP) is engaged in providing consulting and sourcing services for HMOs that market Medicare Advantage managed healthcare plans, as well as to healthcare providers in the state of Florida. In mid-January, QGP announced a multi-year service agreement with IBM.

Nextwave Wireless, Inc (NASDAQ: WAVE) is a mobile broadband and multimedia technology company that develops, produces and markets mobile multimedia and wireless broadband products, including fourth generation (4G) wireless broadband semiconductors.

Aviza Technology, Inc (NASDAQ: AVZA) designs, manufactures, sells and supports semiconductor capital equipment and process technologies for the global semiconductor industry and related markets. In early January, Aviza raised their net income guidance, which helped launch the shares from 10 cents to 30.

Incidentally, the 10 stocks above aren’t just the top penny stocks of 2009; they’re also the top performing stocks on any of the major exchanges…

Let’s take a look, for comparison sake, at the top 10 stocks from the Dow so far in 2009…

As you can see, there’s quite a contrast in the top performers from each category. As you’d probably expect, the top blue chips have had more modest returns than the top penny stocks. Although the performances of IBM and Kraft have been impressive thus far in 2009, those companies don’t offer investors the same explosive growth potential that can be found with small cap stocks.

Even with the ongoing market mayhem, penny stock investors still have the opportunity to grab some big gains. It’s not an easy task, but careful research and patient buying can pay some huge dividends down the road.

Sincerely,
John Schuler

January 27, 2009

John Schuler

After studying history in college, John worked for several years in finance and supply-chain management. He now draws on that experience when scouring the small-cap sector for penny stock plays. John has a particular interest in well-run companies that are both under-valued and poised for significant growth. John also contributed to Penny Stock Fortunes.

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