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.

NightHawk Radiology Holdings (NASDAQ: NHWK) is the top speculative idea from Cory Janssen, editor of the Investopedia Advisor.

He explains, "Founded in 2001 and publicly traded for less than one full year, NightHawk took an otherwise run-of-the-mill component of the medical services industry, emergency radiology, and carved out a valuable niche for itself. Here's the diagnosis:

"Traditionally, hospitals and radiology clinics needed to have qualified radiologists on staff during all hours of the day; unfortunately, highly skilled employees prefer to work daytime hours. This makes it difficult for hospitals and clinics to meet their night-time radiology needs.

"Nighthawk recognized this logistical problem could be solved. It established radiology worksites in Sydney, Australia, and Zurich, Switzerland, providing on-demand immediate radiology services for hospitals and clinics all across the U.S. Its customers send the results of their radiology scans to NightHawk and its American-trained radiologists respond with detailed analysis, usually within 20 minutes or less.

"NightHawk's customer base continues to expand, and its full-year sales revenues surged by over 60% during 2005, tallying $64.1 million compared to $39.3 million in sales from 2004. The company's valuable business model has not been lost on the market, as it currently trades at a hefty forward P/E ratio of 37.5.

"This isn't a stock for the faint of heart, as it will surely see its ups and down in the quarters ahead. As with any company that is literally forging its own industry, NightHawk doesn't offer investors very clear forward visibility, and it's not possible to determine if or when its competitive advantages could become commoditized.

"However, for those willing to tolerate the stock's ups and downs in the short-term, NHWK shares offer an outstanding opportunity to capitalize on an emerging industry, which by all accounts should grow to become the dominant business model for the after-hours radiology industry in the years to come."

Disclaimer: Cory Janssen currently owns shares in the stock mentioned in this article. To see Cory's favorite conservative stock for 2007, click here.