Coverage of Small-Cap and Micro-Cap names that we think are poised for immediate upside

UDRL - Union Drilling - Energy Trader Profile: The oil & gas drillers have continued to be strong and IPOs in the space have had a recent history of trading sideways out of the box, then making a sharp move higher. Most notably, SWSI traded sideways in the low 20s for a few months before spiking higher. SWSI is now up 119% from its offering price. Others include HERO +59%, BRNC +57%... Union Drilling (UDRL) came public in mid-Nov at $14. The stock has done little since, so that's why we are interested. The co provides contract land drilling services, primarily to natural gas producers in the US. The co has a fleet of about 70 land drilling rigs. Its results have been impressive as revs for the 9 mos ended Sep 30 were $95.2 mln, up 94% yr/yr, and the co is profitable. A potential catalyst is that lead underwriter JP Morgan is likely to initiate coverage in the coming weeks... The stock is up less than $1 from its $14 offering price. As such, the stock has the potential to get picked up by traders as an overlooked gas driller. Mkt cap $309mln, float 11mn, avg vol 275k.

TSCM - TheStreet.com - Momentum Profile: TheStreet.com broke out yesterday to a new 52-wk high on 7x avg daily volume, so we thought we'd take a closer look. The success of Jim Cramer's Mad Money show is proving to be a catalyst for driving subscriber growth at the TheStreet.com. In Q3, the co added 7,500 net subscribers to its premium service and the co expects the trend to continue in Q4. In its Q3 report, the co reported the highest deferred revenue in its history, its highest quarterly subscription revenue and its fourth highest bookings of $6.1 mln... Other catalysts driving the stock include: 1) Cramer getting a lot of publicity (CNBC, cover of BWeek, radio show, etc); 2) On its last conf call, the co seemed quite focused on enhancing shareholder value and did not balk when questions were posed about a possible takeover. Anecdotally, we noticed a lot more buyside interest on the Q3 call than previous calls; 3) In June, the co jettisoned its money-losing Research Brokerage unit, IRG; 4) Marketwatch got multiple bidders when it put itself up for sale; 5) Remember, that last January, the co hired Allen & Co. to explore strategic alternatives... Also, note that co is profitable and has $1.18/sh in cash/inv with no LT debt.

WPSC - Wheeling-Pittsburgh: beaten down steel stock may be worth a look...With steel stocks so strong today, we thought we'd take a look at much-maligned WPSC. The co's include hot rolled and cold rolled sheet and coated products such as galvanized, pre-painted and tin mill sheets. The co's poor operating performance and high debt levels has sent the stock down 80% from its highs in March 2005. However, the stock has been forming a decent base for in the $8-9 range the past few months. The stock now trades at less than 0.5x book value. There has been a lot of talk regarding consolidation in the space. Dofasco has received rich offers from Arcelor and ThyssenKrupp, JOR is being acquired by RS and there has been speculation US Steel (X) is on the block, perhaps with Mittal (MT) being the buyer. Foreign steelmakers have been trying to buy North American steel assets to gain quick access to the stronger US markets. Despite the stock price, WPSC has decent assets including a coke plant coming online. The stock is also a potential LBO candidate if the stock continues to languish. Not sure we love it here fundamentally, but with the group strong recently (CHAP, CMC, CRS, GGB, IPS, NUE, OS, RS, RYI, USAP and ZEUS are all near new 52-wk highs), this one may get picked up as a second tier play.

Rediff.com India Ltd finding momentum crowd interest as BIDU play; stock up 14%, though volume light at 105K shares (REDF) 9.00 +1.10 : With all the Chinese net plays having run following the BIDU offering, now starting to see interest in Indian names such as REDF.  Rediff.com is an online provider of news, information, communication, entertainment and shopping services for Indians. Revenues for the quarter ended March 31, 2005 grew by 36% year on year to US$3.5 million. India Online revenues for the quarter ended March 31, 2005 grew by 88% year on year to US$2.1 million and accounted for 61% of total revenues. Net loss for quarter ended March 31, 2005 was US$0.24 million or 0.9 cents per ADS, compared to a net loss of US$2.1 million or 8.2 cents per ADS for the same period last year... Briefing.com Note: This is a thin stock that trades with a big spread, so be careful if considering it for a trade