No, that's not a teaser from Motley Fool. Spectrum Control Inc. (NASDAQ: SPEC), maker of electric components for aerospace and telecommunications use, began the year trading at $9.92. The stock reached a high of $17.78 in mid July before losing some ground. This prompted company director James Tooley to sell 20,000 shares for $292,000 on 28 September. Turns out he should have held on, as the stock closed on 9 October at $17.15, having gained $2.60 since Tooley sold and the company reported good 3Q earnings. Don't feel too bad for Mr. Tooley. He still owns 33,442 shares of Spectrum Control, which shows no signs of losing ground in the near future.

Spectrum Control is organized into four business units, three of which showed little to no increase in revenue in 3Q 2007 earnings, primarily due to flat sales caused by a slow down in defense contracts spending. Nonetheless, long-term growth prospects look good for Spectrum as sales increased 73%, to $5.4 million, in the company's Sensors and Controls unit. This growth in sales was driven by both acquisitions and organic growth, especially as the company expands its product applications in medical and meteorological instruments. For the year so far, sales in this unit are up 126% to $15.5 million.

Given the growth in the snesors and control unit, Spectrum CEO Dick Southworth forecasts 4Q 2007 sales to be $35.5 - $36.5 million, or EPS of $0.24-0.26, a 60% increase. Everybody needs a few microcaps in the portfolio. This one looks interesting.