Stocks That Could Double in the Medium-term: QSPA and PVSW

I'm excited about the prospects of these two in the near-term. These picks are meant to carry a 12 to 18 month time frame. Here are the two stocks and my thoughts:

Quepasa.com (QPSA) – This company is a Hispanic competitor to Facebook. Quepasa.com is the only publicly traded social network of its type. Their management has done a great job of attracting registered users. The number of registered users on the website now numbers over 30 million. Quepasa.com reported adding 2.0 million users in March 2011 alone. Quepasa.com also reported significant improvement in user engagement during March, with Page Views per Return Site Visit of 24.6, representing a 68% year-over-year increase.

The stock has been on the rise as of late; it currently trades in the $7 range. If the company successfully leverages its user base to generate higher traffic, QPSA’s valuation will skyrocket - it could potentially reach $40 per share. If it fails, the shares could fall into the $2 range (assuming it isn't acquired by another company with better ideas about how to increase traffic or looking to increase market share -- both of which are relatively likely scenarios). Thus, an investor is risking a $6 loss to potentially make $30. When dealing with a high-risk, high-reward situation these are the kind of odds I like to have on my side.

Pervasive Software (PVSW) –
Pervasive Software possesses a great combination of characteristics I seek in an investment. The company is relatively unknown and has a strong balance sheet, which gives it a low risk-profile. At the same time, it is entering new product cycles, while simultaneously emerging as a best-of-breed player is not new area. This gives it a very high reward-profile and makes it an extremely attractive acquisition candidate for leading IT vendors like: IBM (IBM), Oracle (ORCL), and Microstrategy (MSTR). The stock is presently trading in the $6 range, but there are several reasons to believe it could reach $20 before long.



Disclaimer: Before investing in any stocks, understand the risks involved.