Zac Bissonnette has written extensively about how penny stocks, or stocks trading below $5, promote themselves through big name lab connections, big name celebrity connections, ads on CNBC and how sometimes, just sometimes, they have to settle with the SEC. As somebody who's made and nearly lost a small fortune playing penny stocks, I've decided to get people to stop whining about the ugly side of this niche and learn to profit from it!

And, I mean profit from it legally -- that being to buy these stocks when they're being hyped and to short sell them when the hype wears off. The old Manhattan two-step. While I prefer to short sell, these stocks are already priced so low, the risk-reward ratio favors buying them. That's right; I'll gladly buy into companies I know to be questionable because my time horizon is short and I know no matter how often Zac and other people write about this subject, there are new suckers all the time. The great fool theory and all that. Time and again, these suckers naively throw their hard-earned cash into these long shots without bothering to learn about the risks involved. Since you're reading this, you've already proven that you're not just another sucker and that's good -- congratulations!

So, go on, follow these stocks and learn to play the hype game -- BloggingStocks willing, I'll be writing many more articles to help demystify this greatly misunderstood niche. I think you'll find that while penny stocks are more volatile than stocks like Wal-Mart (NYSE: WMT), they are surprisingly liquid and the games they play are surprisingly similar to the games played by respectable Wall Street companies.

Timothy Sykes writes for the blog timothysykes.com, is a former hedge fund manager, the star of Wall Street Warriors and author of the book, An American Hedge Fund: How I Made $2 Million as a Stock Operator & Created a Hedge Fund.

Standard & Poor's Scott Kessler offers three strong buys for 2008: eBay Inc (NASDAQ: EBAY), Corning Inc. (NYSE: GLW) and Oracle Inc. (NASDAQ: ORCL).

Of the 267 stocks whose coverage Kessler oversees, 14 are rated strong buy. From those, Kessler likes these three:

• eBay - Up 15% in the last year, eBay still seems undervalued to Kessler. He thinks its marketplace business is pretty strong -- with good growth in the U.S. and Germany, likes its acquisitions of shopping.com and StubHub and thinks eBay will benefit from international growth. He believes that its PayPal unit is "unheralded" and that it will grow by expanding geographically, by taking on new currencies, and by grabbing new off-eBay payment opportunities. He thinks Skype's new management will find a way to monetize the service to its 100 million users and believes eBay, at a P/E of 20 and forecast 2008 EPS of $1.77, is poised to grow 20% at the low end -- and thus it's reasonably priced.
• Corning - Kessler likes Corning's business mix of flat panel displays, telecommunications infrastructure, and alternative energy. He thinks it will earn $1.53 in 2008 and that at a P/E of 16 and 16% earnings growth, Corning is reasonably priced.
• Oracle - Kessler thinks that despite a forecasted slowdown in corporate spending on technology, Oracle will benefit from two trends: international growth and consolidation in the business software industry -- a trend which Oracle has been pushing. He thinks Oracle is reasonably priced at a P/E of 18 on what he expects to be 2008 EPS of $1.21.

I'd recommend taking a look at these -- but try to decide whether you think they're selling at a good price. One way to do that is to calculate their Price/Earnings to Growth (PEG) ratios -- which divides their P/E by their forecast earnings growth rate. If the number is less than one, the stock may be fairly valued.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.

But wait ... there's more! In the giving spirit of the holidays, here's a bonus pick for bargain-hunters looking for stocks under the $10 threshold. Skyworks Solutions (NASDAQ: SWKS), manufactures semiconductors that are used primarily in wireless telephone handsets and infrastructure products. Nearly 40% of the company's sales are thanks to Motorola (NYSE: MOT) and Sony Ericsson Mobile.

The firm has been a solid performer in the earnings confessional of late, topping analysts' expectations consistently for the past five quarters, by an average surprise of nearly 15%. On November 1, the company reported fourth-quarter profit of $22 million, or 14 cents per share, a penny above Street expectations and a welcome change from a year-ago loss of $96.4 million (60 cents per share). Looking ahead to the current (first) quarter, SWKS officials targeted first-quarter profit -- excluding items -- of 15 to 17 cents per share.

It's time to wrap up our list of 10 stocks under $10. The list was culled from a large grouping of momentum names that have outperformed on a relative-strength basis during the short and intermediate term. The selection was filtered to eliminate any stocks trading above the $10 region, naturally, and then adjusted for other fundamental, technical, and sentiment factors. I hope you've had fun learning about some potential bargains for your portfolio and hearing the stories behind some equities that you've likely not come across in your daily investing research.

The last entry (and these have been in no particular order, by the way) is Allos Therapeutics (NASDAQ: ALTH). The pharmaceutical company is hard at work on technology that improves existing cancer medications. According to Hoovers Online, ALTH's current lead drug candidate -- PDX -- is in trials to combat T-cell lymphoma. Some of the firm's other proposed treatments work to fight solid tumors and lymphoma.

General Moly (AMEX: GMO) is a mining company that specializes in mineral development and exploration in central Nevada. On November 19, the company announced a strategic alliance with ArcelorMittal (NYSE: MT), which includes MT's purchase of 8.2 million shares at $8.50 per share, for a net investment of about $70 million. After this transaction, MT will own roughly 12.6% of GMO's outstanding shares. GMO will in turn supply approximately 6.5 million pounds of molybdenum each year for five years once its Mt. Hope deposit begins production.

GMO shares have been moving higher since February, when they collided into their 10-month and 20-month moving averages after months of sideways consolidation. Since this impact, the stock has nearly quadrupled in value to hit a new all-time high.

Currently, from a shorter-term perspective, the stock is pulling back to test double-barreled support around the $8.50 level. Not only is this the site of the security's July 2007 valuation (former resistance can come back and serve as support), but it is currently home to GMO's rising 10-day moving average as well.

Ampal-American Israel (NASDAQ: AMPL) is a Massachusetts-based holding company with interest in more than a dozen Israeli and Israeli-related firms. The company's niche business is commercial real estate and the leisure industry, including retail outlets. Earnings at AMPL jumped to $11.9 million in the third quarter -- or 22 cents per diluted share -- compared to the net loss of $1.8 million swallowed in the previous year.

AMPL shares have moved 47% higher in the past 52 weeks, compared to a 4% increase in the S&P 500 Index. The equity's relative-strength showing has indeed been stellar, and has improved as well during the last several weeks. Since September 18, AMPL shares have ridden their 10-day and 20-day moving averages higher to post a gain of 33% in slightly more than 2 months. The recent market pullback has had little impact on the shares, which have continued higher even while the broader market has stumbled.

Art Technology Group (NASDAQ: ARTG) dabbles in the fine art of business, providing software that helps with customer-service needs, including online-sales management. Included on the firm's roster of past and present clients are Best Buy (NYSE: BBY), Citibank (NYSE: C), and Target (NYSE: TGT).

When the company last visited the earnings confessional in late October, it reported a 64% jump in revenue to $35.9 million, thanks in large part to gains in services revenue. For fiscal 2007, ARTG expects to bank revenue of $130 million to $133 million, with a small net loss of $5 million to $7 million expected for the full year as well.

For much of the past decade, ARTG has struggled in penny-stock territory. From early 2002 through early 2006, the stock enjoyed precious little movement north of the $2.00 zone. Currently, thanks to some recent solid price action, ARTG shares are trading in territory not explored in nearly six years. In the wake of last month's earnings report, the stock spiked higher to overtake its April 2006 peak and pass the $4.00 level.

Incyte Corp. (NASDAQ: INCY) is our next pick from the single-digit sect, and it's not a play for the squeamish. The company is part of the frequently volatile biotechnology industry, and focuses its efforts on drugs that inhibit specific enzymes thought to cause cancer, diabetes, and other serious maladies. After abandoning its DFC medication, designed to help patients with HIV, the company has focused its efforts on a number of other treatments in the pipeline. A successful clinical trial could result in impressive gains in the stock, while another disappointment could send the shares unraveling.

But for now, the stock looks like a nice potential play for an aggressive trader. The stock has been in rally mode since early August, aside from a slight pullback that petered out a few weeks ago. From early August through mid-November, INCY shares had increased more than 80% and toppled several layers of technical resistance.

Currently, the stock is consolidating some of its recent gains as it tests its 10-week moving average. This trendline coincides with chart support at the $8.00 mark, representing the equity's April 27 peak. This level served as resistance seven months ago but may reverse roles and act as support this time around, especially as its presence is bolstered by the 10-week trendline.

With a name like Medical Staffing Network Holdings (NYSE: MRN), it's easy to guess what the company's core business is. MRN coordinates with temporary nurses and other medical support staff and places them where needed, such as hospitals and nursing homes. In the past 12 months, the company has posted year-over-year revenue growth of about 60%.

In terms of relative strength, MRN is among the most potent names on this grouping of single-digit stocks, especially in the short term. Compared to the broad-market-tracking S&P 500 Index, the stock has outperformed by a margin of nearly 135% in the past 20 trading days. Relative strength for the 40-day and 60-day periods is impressive as well.

Brigham Exploration (NASDAQ: BEXP) explores for oil and gas across the Anadarko Basin, the Texas Gulf Coast, and West Texas. According to Hoover's, since its founding in 1990, the company has drilled more than 731 wells. Additionally, BEXP was one of the first small independent exploration/production concerns to utilize 3-D seismic imaging technology in its business.

On November 6, BEXP reported third-quarter earnings (before items) of 8 cents per share as revenue jumped 20% to $31.1 million. Analysts were expecting per-share results of 6 cents on $31 million in sales.

Since forming a bottom around the $4.20 level in early August, BEXP has shot solidly higher along the support of its 10-day and 20-day moving averages. This rally has additionally enabled the stock to muscle above its 20-month (200-day) moving average. In fact, the stock ended October above this trendline, the first such monthly close north of this threshold since December 2006.

Cleveland-based CBIZ Inc. (NYSE: CBZ) offers its services to companies that prefer to outsource some services such as tax preparation, insurance and benefits administration, and IT consulting. The stock has been a strong momentum name in recent months, steadily rising 37% higher since early August. During this monster uptrend, the stock has successfully held the support of its 10-day and 20-day moving averages.

Last Friday (11/16), CBZ overcame its May 2006 peak to topple double-top resistance and hit its highest level since December 1999. Indeed, the shares haven't traded out of single-digit territory since last millennium, but the time could be nigh. In fact, the 10 threshold is less than 10% away.

As its name would imply, TriQuint Semiconductor (NASDAQ: TQNT) is in the chips business. The company maintains a niche in the competitive field by using materials other than silicon to manufacture circuits for use in cell phones, fiber-optic equipment, and other technology. Specifically, TQNT manufacturers its devices with gallium arsenide (GaAs), which can operate faster and more efficiently than its silicon rivals.

After a rough fall from the top along with the rest of the technology sector during the early part of the decade, TQNT has started to show some renewed strength. The equity's relative strength compared to the S&P 500 Index has been impressive of late, with the shares outperforming the broader market since early April.

To keep below the $10 threshold on our first pick, investors may need to get in while the getting is good. Bruker BioSciences (NASDAQ: BRKR) is growing ever-closer to double-digit territory, and now may be the opportune time to open a position. The company develops and manufactures equipment and tools for use in the pharmaceutical and biotechnology fields.

During the past year, sales have grown by nearly 47%. At the company's last earnings report on October 29, the firm said net income jumped to $8.66 million, or 8 cents per share, from $2.98 million (3 cents per share) in the year-ago period. Excluding items, BRKR banked 6 cents per share, or a penny better than Wall Street's consensus estimate.

One of Thomas Jefferson's "Ten Rules" is: "Never buy what you don't want because it is cheap." I've had plenty of $8 shirts and $3 CDs that serve as haunting reminders of this axiom. (Marky Mark and the Funky Bunch? Oh, who am I kidding ... I did want that).

But there's a time and a place for a good bargain. Finding out your local museum offers free visits. Going out to eat on weeknights to score bargain prix-fixe dinners. Taking advantage of the day-after-Thanksgiving sales, torturous though they are.

The same wisdom applies to stock trading. An investor shouldn't scoop up 100 shares of company XYZ just because its price looks like a steal (it could, after all, be cheap for a reason). But there are single-digit stocks that happen to be beckoning for a breakout or ripe for a recovery. Move in at the right time, and you could wind up with a hidden gem for a bargain price ... just like my Marky Mark CD.

In the next few days, I'll be looking at 10 stocks below the $10 threshold that look like decent plays right now. Some will be short-term opportunities; others will be better suited for those who prefer to buy and hold. Naturally, these stocks probably won't all be winners -- consider some on par with those unworn clearance-rack shirts I've long since taken to Goodwill. But for those who say sub-$10 stocks aren't worth the certificates they are printed on, you may just learn something.

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.

I don't think I can count how many times I have heard in my career "you can always count on Coca-Cola, no matter what condition the economy is in." It's as true today as ever. With the markets reacting in a volatile manner, globally, Coca-Cola Co. (NYSE: KO) is as solid as a rock. This $125 billion market capitalization company is only $2 off of its 52-week high of $56.71. The dividend yield is a solid 2.5% and Coca-Cola has a nice history of raising the payout.

Coca-Cola is one of the world's most recognizable brands. Coca-Cola was a global company before most of us knew what "globalization" meant. It is one of the United States most important exports. Besides the flagship product of Coke, the company also markets consumer favorites like Diet Coke, Fanta and Sprite. Latley, the company has expanded its product offerings to include bottled water as health-conscious consumers have gravitated to this sector of the beverage industry. Coke has successfully diversified its revenue and earnings base by expanding to this valuable part of the industry.

The amazing aspect to the Coca-Cola story is how professional portfolio managers view this company. The revenue and earnings growth rates are only about 10%, but yet Coca-Cola sports a hefty price-earnings multiple of 24 times. Portfolio managers have such confidence in the quarterly performance of Coca-Cola and the absolute consistency of its numbers that many refer to Coca-Cola as "the sleep well stock." This means they do not have to worry quarter-in and quarter-out about Coca-Cola achieving stated expectations: it's virtually automatic.