Each year Steven Halpern, editor of TheStockAdvisors.com, surveys the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is part of his 24th annual Top Picks Report.

Fundtech Ltd (NASDAQ: FNDT), an information technology firm focused on banks, is the favorite idea for 2007 for conservative investors from Jon Markman. The editor of Strategic Advantage says, "Based in Israel, the small cap company is run primarily out of offices in New Jersey, and is a great play on the globalization of business in general.

"Despite its small size, with a market cap of just $180 million, it sells its cash- and payment-management software and services to dozens of leading U.S. and European banks, and has deep and growing relationships with two of the very largest: Citicorp in New York and HSBC Holdings (HBA) in London.

"The European Central Bank has issued regulations demanding that banks in all European Union countries charge customers the same amount to move money internationally as domestically. Fundtech has a product that addresses these challenges.

"Citigroup and HSBC are adopting the software, and other major banks are considering it. If just one or two additional major banks, or several mid-tier banks, license the software and implement it, then you will see Fundtech's earnings rise dramatically over the next two years.

"Even in the unlikely situation that no other big banks adopt Fundtech's solution, I think this is a great company and stock. Because most of its products produce recurring licensing and service revenues, the company has excellent visibility into each quarter's earnings. Expect Fundtech earnings to rise from around $0.45 this year to at least $0.65 per share in 2007, and as much as $0.81 in 2008.

"The P/E multiple on my 2007 estimate is just 17, despite growth that should be in the 20% to 25% range. If the Fundtech story gets traction and trading volume picks up, I expect the P/E to trek toward the industry average near 25, which suggests a potential price in early 2008 in the low $20s. Discount that back a bit and I get a $16 target for the next 12 months."

To see Jon's favorite speculative investment for 2007, click here.