Overhill Farms, Inc. (AMEX:OFI) is a smartly-positioned California company that manufactures frozen foods and packaged frozen meals. Its products include frozen soups, sauces, and entrees for retail sale under the Chicago Brothers label. The company also provides private label and co-packing agreements with such retailers as Costco, Sam's Club, and Safeway; as well as Jenny Craig, the weight loss company. Overhill Farms also serves several domestic airlines. The company has two manufacturing facilities in Vernon, California.

Overhill Farms reported record net income of $1.6 million for the first quarter ended December 31, 2006, on revenues for the quarter of $40.5 million. This is a 156% increase in net income from the $607,000 for the first quarter of last year, and a 2.4% increase in net revenues from the $39.6 million reported a year earlier. What I really like here is year-over-year quarterly earnings growth of 156%.

Also, Lehman Brothers is the biggest institutional shareholder with Wellington a close second. Even CALPERS, California's huge state pension fund, has a piece. Why would they invest in such a small business?

The answer is easy and goes beyond being the supplier of meals for Jenny Craig. Overhill Farms has a broad array of clients and will be able to survive food and transportation inflationary pressures because of the high quality nature of its food and its varied customer base, which includes high-end supermarkets, the airlines, and the ever growing ranks of American dieters. Quality is the key here along with an image of organic-like quality and freshness in frozen food.

James Rudis, Chairman and CEO of Overhill Farms, believes the company will have a revenue run rate of $200 million by the third quarter of this year. Overhill Farms recently signed a three-year agreement to produce meals for a major national food brand which is expected to generate first year sales of approximately The company is also scheduled to being production, late in the second quarter, of 24 new private label food items being introduced by a major West Coast grocery chain.

Type of Company: A small cap gem that has the chance to be acquired or grow rapidly with accounts ranging from high end restaurants, to discount grocers and the airlines.

Stock Target: Overhill's stock price has room to keep growing from its already lofty $5.80 to at least $10 by the end of 2007.

Hilary Kramer is a financial editor and money coach for AOL and an authority on investing. Visit her at www.hilarykramer.com.

On January 31, I was on PBS's Nightly Business Report and highly recommended the stock of Big Lots, Inc. (NYSE:BIG.) On that date, the stock was $25.93 (the stock is hovering around $30 today). I was very bullish because of the surprise upside I predicted would come in the year-end earnings announcement.

Until the end of 2005, Big Lots' earnings often disappointed and had been a painful position to hold for many a hedge fund and long investor that sat through the bankruptcy of KB Toys (it spun off the business in 2000 but the ramifications of the bankruptcy still hurt its bottom line) and numerous disappointing quarters. In fact, Big Lots is an example of a company that has truly turned itself around. By the end of 2005, the company had shuttered more than 600 of its stores in order to execute a retail turn-around fairy tale. According to the company's press release, the company's net income for the year (ended February 3) was $124 million versus a net loss of the previous year of $10 million. Comparable same store sales increased 4.6%.

Why am I writing today? Because I noticed that KeyBanc's Jeffrey Stein, who covers the company, raised his rating on the stock to a buy from hold last week. Stein's research report excerpts (as picked up in MarketWatch) note that the company's "transformation has been dramatic over the past 12 months, far surpassing expectations....Despite operating in a highly populated and competitive space, we believe that Big Lots has been able to distinguish itself by improving costs and providing a more compelling value proposition to the consumer."

On January 31 I wrote about a small cap company that had attracted my attention on the recommendation of some really smart biotech specialists. The stock closed on January 30 at $13.70 and is now $18.30.

I still maintain that, if you're risk-averse, stay away from Medivation, Inc. (AMEX:MDV) -- it isn't for you. The company has yet to bring in any revenues, and it will be operating at a loss for at least another couple of years. Given all of this, you might be surprised to hear that the stock price rose more than 400% in 2006, and is still trading well above its 52-week low of $2.75. Lately, there have been some new developments with Medivation. On March 8, the company announced that it will be moving from the American Stock Exchange to the NASDAQ on March 20. In the press release, David Hung, M.D., President and Chief Executive Officer of Medivation states, "We believe this is a significant step in Medivation's growth that reflects our financial and clinical accomplishments to date."

Given NASDAQ's tough standards, I can agree that Medivation seems to have some nice upward momentum. Dr. Hung is also doing the rounds. He will be speaking on March 12 at the Cowen & Company Annual Healthcare Conference and has been invited to a number of important conferences in the past weeks. Investors have been buying this company because of Dimebon, which recently finished very promising Phase II testing for
Alzheimer's. Patients taking Dimebon had improved memory and cognitive abilities, and if the drug continues to do well in its testing, it could become one of the most successful new drugs in a very long time.

Right now the other Alzheimer's drugs can only slow down deterioration; a drug that reverses these symptoms would be very popular, especially with a Baby Boom generation getting closer to its dotage. According to the company's press release, the results of Phase II trials will be presented for the first time on March 18 at a scientific meeting at the 8th International Conference on Alzheimer's and Parkinson's Diseases in Salzburg, Austria. Shareholders, and more importantly those struggling with the devastations of the disease (and we all know someone who is suffering), will be awaiting the results.

MDV is planning a global Phase III round of testing in 2008, and it hopes to have the drug up for marketing approval by 2010. Some investors are frustrated with this rather long schedule and the stock lost some value after MDV announced its plans. Some people feel that Dr. Hung over-hypes his products, while others think he is a visionary scientist who could revolutionize the treatment of Alzheimer's.

This is still a very risky stock and you are going to have to hold it for a while before MDV starts making money (Medivation's other main drug, which treats prostate cancer, is also in early stages of testing). But the upside is
tremendous if things go well, and if you have some money to risk, this might be an interesting bet. I have taken the bet but I have been careful to only buy a relatively small amount of the stock for my own portfolio This is more like going to Las Vegas because of what is known as the binary nature of biotechs: It's all about a pass or fail grade through the testing phases.

Type of stock: A very risky small-cap pharmaceutical company with a potential blockbuster Alzheimer's drug.

Price target: At $18.30, you may have already made your money if you bought when I first recommended the stock at $13.70. If so, no harm in taking your gains. If you haven't been in yet, there is still real upside left, but the risks remain. If the drug works, then this stock is going to the moon -- upwards of $50. If not, you are looking at zero. Tread carefully.

Hilary Kramer is a financial editor and money coach for AOL and an authority on investing. Visit her at www.hilarykramer.com.

When Vonage Holdings Corp. (NYSE:VG) was started in 2000, it seemed an exciting new company: a way to use the internet to supply cheaper phone service with all kinds of neat possibilities, like linking your phone to your email account. The technology was rough in the beginning, with echoes and delays, but people felt there was real potential here. Vonage ultimately went public in May 2006 at a price of $17. By then the company had moved from a new, niche technology to a mainstream company.

Yet, the stock dropped immediately after the IPO and, as of this writing, hasn't even come close to recovering. The fact is, this stock is done and it wouldn't surprise me if Vonage went out of business.

Many Vonage investors are probably scratching their heads and wondering what happened. Demand is only increasing for internet phone, and many people think it's the way all phone calls will be made in the future. The problem is, by the time it went public, Vonage had far too much competition from other internet telephone services. Traditional phone companies like Verizon offer their own plans, as do cable companies like Time Warner. There are also many other smaller internet phone companies offering their own inexpensive plans, often as low as $19.95 per month.

It's not that Vonage has necessarily done anything wrong; while it's still operating at a loss, its revenues have been increasing at more than 10% every single quarter since the last quarter of 2004. The problem is that it's operating in a ruthlessly competitive market and it doesn't have the muscle to compete with companies like Verizon Communications (NYSE:VZ) and Time Warner Inc. (NYSE:TWX), especially since those companies already have reliable customers for their other services and can offer them deals for bundled services that are much more appealing than what Vonage has to offer.

To make matters worse, Vonage is now being sued by Verizon for allegedly infringing on Verizon's voiceover internet (VOIP) protocols! While I respect what this company tried to achieve, I'm sorry to say there's just no hope for this stock.

Type of stock: An exciting new company that blended telecom and the internet to offer a new type of phone service.

Price target: None. If you don't own this stock now, don't buy it. You might see it climb a dollar or two (it's currently just above $5), but you'd be better off taking the loss and trying to make up for it elsewhere. It is a possible acquisition candidate -- another company could certainly make use of Vonage's subscriber base -- but any acquisition price isn't likely to be much higher than the stock is now.

Hilary Kramer is a financial editor and money coach for AOL and an authority on investing. Visit her at www.hilarykramer.com.

Anyone who has been awake over the past couple weeks witnessed JetBlue Airways Corp. (NASDAQ:JBLU) suffer one of the worst PR fiascoes in recent memory. The airline tried to keep its planes flying despite terrible storms, leading to passengers spending hours on the tarmac, and then days in the terminals when JetBlue then had to cancel many of its flights. CEO David Neeleman was quick to apologize and promise compensation, but the stock took quite a tumble anyway.

But JetBlue, known for having smart, responsible management (several top executives declined their bonuses in 2005 when results were bad), learned its lesson quickly. On Monday it canceled a number of flights due to another major storm -- simply to make sure it had all its planes in place to resume business as soon as possible. This enabled JetBlue to take some short, fixed losses to avoid the extensive costs and bad press from the previous storm.

It also offered a new "Passenger Bill of Rights," which offers specific monetary compensation to customers who get stuck because of "controllable" delays. Neeleman also promised to update the company's flight-tracking and planning systems, which haven't kept up with the company's rapid growth.

So far, so good. Now we'll see if customers start coming back. Even if they do, JetBlue has to compete in a ruthless industry with high fixed costs and unstable fuel costs. Other airlines are dropping their prices to compete with JetBlue's. It can't keep adding routes at the same rapid pace we've seen over the past few years, and so will need to find new ways to grow profits.

So much of business is about inventory management; in the case of airlines, it's about making sure your planes are there when they're supposed to be. JetBlue's model is based on very quick turnarounds to keep costs down, which means they cut things very close and are probably more susceptible to delays than other companies. This is compounded by the complexity of managing a company that has grown extremely rapidly. Not surprisingly, JetBlue's track record with delays is only moderate. Other airlines do better.

If JetBlue can learn to improve its inventory management and still manage to keep its low unit costs, this stock could rebound, but I'm not sure it has a huge upside anyway given the competition. It's too bad that recent trouble came just as JetBlue was coming off an excellent 2006 that saw operating income grow nearly 300% after a very rough 2005. Nevertheless, I think this is a company that can get itself back on track.

Type of stock: A low-fare airline that is coming off a disastrous month. This may be an opportunity stock, in fact.

Price target: This stock was rising steadily from a low of about $9 in October, and it got up above $17 in January. I don't see it climbing above $15 again for at least a year, so I wouldn't buy unless you see a dip below $10. Even then, I'd be leery; I wrote in June that I thought it could drop as low as $5 (it did dip, but only to $9), and I still think this is a company with a tough row to hoe.

Hilary Kramer is a financial editor and money coach for AOL and an authority on investing. Visit her at www.hilarykramer.com.

Back in June of last year, I wrote a blog pick recommending Hovnanian Enterprises, Inc. (NYSE:HOV) despite all the fears about rising interest rates, falling real estate values, and the general sense that the bubble had burst. At the time, I wrote that HOV was a more savvy, more diversified homebuilder than most of its competition and that a downswing was a good time to get a stock at a discount.

If you followed my advice then and bought around $30, you would have seen the stock drop to around $25 over the summer, and then climb its way back above $35 and toward $40. It's now around $35.

I still think HOV is a very smart company and I like the fact that it has a large number of orders in the pipeline and land options that decrease its risk and capital costs. It has been acquiring lots of companies to give it better economies of scale. My guess is it won't be hit as hard by real estate woes as its competitors will be.

But I wouldn't get into this stock right now. Recent real estate reports have looked quite glum, with new construction down 14% in January to the lowest levels since August 1997. Existing home sales have dropped in 40 states. Most urban markets are having a tough time. While we may not see any catastrophic collapse in real estate, the market is clearly going to take a while to come out of its funk, and with interest rates remaining high because of a strong economy, it doesn't look like we'll see any growth driven by falling mortgage costs.

But keep your eye on this one; it's a great company if you can grab it at a discount.

Type of stock: A diversified and well-managed homebuilder that is being brought down by industry-wide doldrums.

Price target: I still think this is a good buy around $30, and certainly if it gets into the $20s, as long as you can be patient and hold the company until the sector rebounds. It might be a year or two, but it will grow again.

Hilary Kramer is a financial editor and money coach for AOL and an authority on investing. Visit her at www.hilarykramer.com.

I've long admired investor and billionaire Sam Zell, and when he likes a company like American Commercial Lines Inc. (NASDAQ: ACLI), I'm tempted to follow him. This company, which manufactures and operates barges, saw its price drop more than 8% when it announced its fourth-quarter results, but within a couple days ACLI had made back most of the difference, in large part because the results were good even if they didn't meet investor expectations.

According to the company's press release, profits were nearly four times as high as the fourth quarter of 2005, and revenues were up 18%. Results for the year were even better, with 2006 showing revenues up 32% and net income up 681% over 2005. So if the price tumbled because the results for the fourth quarter weren't exactly what was expected, it's no surprise that investors saw the dip as nothing more than a chance to get the stock at a discount, rather than as anything to worry about.

I think these strong results are only going to continue for the next year or two; ACLI has been able to raise rates on many of its customers, and its production division, Jeffboat, has contracts that will take it through 2008. Of course, if oil keeps going up in price, this could dampen profits. The business is known for being cyclical and highly competitive. But, luckily, barge shipping is much less reliant on fuel than other types of shipping, and ACLI's management has shown itself more than capable of maximizing profitability. But for now, I think this looks like yet another winner for the brilliant Sam Zell.

Type of stock: A barge manufacturer and operator with terrific profits and a bright outlook for the next year or
two.

Price target: As of February 20, a split will take place, so I'd wait until then and buy soon after the split takes
place. This stock doubled over the last year, and I think it' s going to go up as investors who'd been hesitating at $70 take advantage of the lowered stock price. I project that the stock could reach $80 by the end of 2007.

Hilary Kramer is a financial editor and money coach for AOL and an authority on investing. Visit her at www.hilarykramer.com.

The recent departure of The Home Depot, Inc. (NYSE:HD) CEO Robert Nardelli has to be one of the more dramatic resignations in recent memory. Then, in the beginning of February, two more executives, a high-level human resources exec and the general counsel, both of whom were close to Nardelli, announced they, too, would be leaving the company. These changes could be good for HD and might encourage investors to jump in, but I'd still stay away from this company for now.

Last May, when HD was at $37.70, I predicted the stock would drop, and soon after the price started dipping, eventually reaching as low as $32.75 after trading near $45 in April. My objections to HD were its terrible customer service -- I can never find anyone to help me when I shop there, and everyone I know has had the same problem -- and the fact that the slowing housing market would mean lesser demand for HD's wares. The third quarter was indeed a tough one for The Home Depot, with profits dropping 3%. The fourth quarter results aren't in yet, but the stock has regained some ground since last autumn and is trading just above $40.

I don't think Home Depot is going to get much higher, and a poor fourth quarter could send it down below $40. Mortgage rates jumped again this year, and they are now at their highest since October; with the economy still growing steadily, it doesn't seem likely we'll see any dip in rates for a little while. The housing bubble may pick up again, but high mortgage rates will dampen growth, and I don't think the housing market will grow in any serious way that will really help Home Depot. If you really must buy a home-retailer, I'd go with Lowe's Companies, Inc. (NYSE:LOW). It's simply a better run store, and while it's smaller, I think it's going to see superior growth to The Home Depot. Lowe's also had a rough third quarter, but its stock is on the rise. It split in July 2006, and then had a rough August, but its stock has gained about 33% compared to HD's 25% since September.

Type of stock: The largest home repair retailer in the country, which has just undergone major personnel shifts, but will continue to struggle with a soft housing market.

Price Target: During 2007, I don't think HD is going to grow much above $40 unless the housing market takes off. If you see mortgage rates drop or see the real estate market recovering, you might want to take a chance on this, but even then I think Lowe's is the better bet.

Hilary Kramer is a financial editor and money coach for AOL and an authority on investing. Visit her at www.hilarykramer.com.

If you're a cautious investor, Medivation Inc.(AMEX: MDV) probably isn't for you. The company has yet to bring in any revenues, and it will be operating at a loss for at least another couple years. Given all of this, you might be surprised to hear that the stock price rose more than 400% in 2006, and is still trading well above its 52-week low of $2.75.

Investors have been buying this company because of Dimebon, which recently finished very promising phase II testing for Alzheimer's. The patients taking Dimebon had improved memory and cognitive abilities, and if the drug continues to do well in its testing, it could become one of the most successful new drugs in a very long time. Right now the other Alzheimer's drugs can only slow down deterioration; a drug that reverses
these symptoms would be very popular, especially with a Baby Boom generation getting closer to its dotage.

MDV is planning a global phase 3 round of testing in 2008, and it hopes to have the drug up for marketing approval by 2010. Some investors are frustrated with this rather long schedule, and the stock lost some value
after MDV announced its plans. Some people feel the CEO, Dr. David Hung,overhypes his products, while others think he's a visionary scientist who could revolutionize the treatment of Alzheimer's.

Obviously, this is a risky stock and you're going to have to hold it for a while before MDV starts making money (its other main drug, which treats prostate cancer, is also in early stages of testing). But the upside is tremendous if things go well, and if you have some money to risk, this might be a great bet.

Type of stock: A small pharmaceutical company with a drug that could be a huge windfall.

Price target: If you're interested in buying this and holding for the long term, I think you need to buy at a time when you'll minimize your losses if things don't go well. Without any major testing coming anytime soon, it's possible some investors will get tired and sell, and we could see the price drop to near $10. I think if you can buy this for $12 or less, it's worth the risk.

Hilary Kramer is a financial editor and money coach for AOL and an authority on investing. Visit her at www.hilarykramer.com.

The Western Union Co. (NYSE:WU) has over 270,000 locations globally in just about every country in the world. In fact, 80% of the locations are outside of the U.S. Western Union is perfectly positioned to enjoy the continued trend of cross-border commerce.

This company handles transfers of money between businesses, and it is the trusted global standard it sets that drives its market dominance and continued growth -- especially in the emerging markets. I am always asked how to play the China opportunity. Well, this is a way to invest in the growth of China's commerce and expanding economy. Just as Western Union is synonymous with trusted money transferring in the United States, it is the same in China, India and Latin America.

In fact, if you have ever wired money to a relative, friend or a company, chances are you used Western Union. Like Q-Tips or Band Aids, Western Union's name is virtually synonymous with its product. The company was spun off from its parent First Data Corp. (NYSE:FDC) in September 2006.

Since December 2000, Bristol Myers Squibb Co's (NYSE: BMY) stock price has disappointed even the most loyal of shareholders. However, this Big Pharma stalwart is finally poised for some serious growth and to provide some joy to those who have weathered the ski slope downward followed by years of flat line stock movement.

Revenues haven't grown since 2004, and many of the company's patents have expired, leaving them open to generic drug competitors. There have been some questions about accounting as well as some improprieties that have cost BMY significant money to settle government investigations.

But the company has been plowing money into R&D, and now has several drugs in the pipeline that promise to send this stock up in the coming year. These new products treat a range of ailments from hypertension to HIV to cancer to arthritis, and I think they'll be enough to send the stock price over $30 for the first time in more than four years.

To be sure, BMY still has a few things to worry about. The Democrats have already passed a bill in the House that would allow the government to negotiate pharmaceutical prices for Medicare. The bill has yet to pass the Senate and the president has threatened a veto, but if it passes, it will hurt revenues for BMY and other drug companies. The Democrats also have bipartisan support for a bill that would prevent big companies like BMY from paying generic manufacturers to keep their products off the market for a few years. This too could put a damper on revenues.

BMY also faces a more specific threat from Apotex, a Canadian generic manufacturer that has an anti-clotting drug that would compete with Plavix, a major seller for BMY. There is an injunction against this generic drug right now and the companies have gone to court to determine whether the generic drug can be sold. If BMY loses, it will take a serious hit.

One or more of these potential problems may never come to pass. Regardless, I think BMY is turning a corner and its new portfolio of products will be enough to make this a good bet for 2007.

Type of stock: One of the largest pharmaceutical companies that is on the verge of releasing a number of important revenue-driving drugs.

Price target: BMY has been gaining ground recently and is near the top of its 52-week range. I'd grab it now and ride it above $30 by year-end. There is a nice little dividend to boost your profits even more.

Hilary Kramer is a financial editor and money coach for AOL and an authority on investing. Visit her at www.hilarykramer.com.

Milk has never had a large presence in China, but that's changing very, very fast these days, which has meant great profits for dairy companies like American Dairy (NYSE: ADY). Despite the name, this company manufactures and distributes powdered milk, formula, soybean products, and walnut products in China. With their growing prosperity, Chinese consumers, with the encouragement of their government, are increasingly interested in these products.

Given these trends, and the enormous number of potential customers, there's a huge upside potential for a company like ADY. Even more encouraging, the numbers show the company is already taking advantage of the situation. Net income tripled from 2003 to 2004, then nearly doubled from 2004 to 2005. So far 2006 looks like it continued that growth, with net income for the first six months of 2006 up nearly 84% over the same six months in 2005. Ian Wyatt, editor of The Growth Report, also identified the stock as his top conservative play in Steven Halpern's Top Pick's Report: 2007.

So far, most American investors don't know about this company, and you can still get in early. In late December the management of ADY announced that it would be making a push in America in 2007; as more investors become familiar with its great results and even greater potential, we could see this stock price really climb in 2007.

Type of stock: A dairy and soy company in China, one of the potentially largest dairy markets in the world.

Price target: ADY is currently at the very top of its 52-week range, but I wouldn't be scared off. I think we're going to see significant growth in 2007, followed by steady growth for years to come. I see this stock going to $30 in the next three months---the company is doing a road show in the United States in the coming weeks. So, get in now. Also, the big potential is if ADY "lists" its stock on the Shanghai exchange.

Hilary Kramer is a financial editor and money coach for AOL and an authority on investing. Visit her at www.hilarykramer.com.

A couple of months ago, I wrote an entry for Tyco International Ltd, (NYSE:TYC) explaining that I didn't think the growth prospects were strong enough to take a big chance on the stock. Since then, Tyco has announced new quarterly results, and the growth -- although not breathtaking -- is certainly heading in the right direction.

Growth has been strongest in the electrical division and weakest in the health care division; results have been middling in the engineering and security divisions. The price has climbed a dollar or two since then, but that's the nature of a stock that is as volatile as Tyco.

There has, however, been a development that makes Tyco much more appealing in my eyes. The company has announced a restructuring plan, which involves breaking up into three separate companies: A health care company, an electrical company, and a security/engineering company. This could prove to be a great boon to shareholders clever enough to look past this company's history.

If you've been to the movies recently, there's a good chance you were at a theater owned by Regal Entertainment Group (NYSE: RGC), the largest theater company in the industry. Owning more than 6,000 screens in 40 states and Washington, DC, Regal makes its money not just off ticket sales and concessions, but also off of renting its theaters out to businesses, as well as advertising. That's right -- those annoying ads you're forced to watch while waiting for the movie to start are real money makers.

I like movies as much as the next gal, but the main reason I like RGC is its substantial dividend, which at $1.20 gives a yield of almost 6%. I also like the size of the company, which gives it leverage to negotiate prices and thereby maximize its profits on concessions, and I like the fact that it's found ways to make money outside of the ticket sales and concessions.

There is some risk with a company like RGC. The year 2005 was tough for ticket sales, for example, and if there are no good movies out a company like RGC may see the effect in its revenues. There are also longer term concerns about competition from companies like Netflix, Inc. (NASDAQ:NFLX) and Blockbuster Online, and of course there's the likelihood of being able to get movies on demand via the Internet. All of this may dampen results over the coming years. But then again, 2006 has seen a boost in ticket sales (along with the inevitable rise in ticket prices), and there's no doubt that Americans still like to go to the movies.

Given all of this, it's not surprising to see that the price for RGC has been pretty volatile over the past couple years. The swings aren't drastic, but they do occur, and if you decide to go after RGC and its dividend, you may want to wait for a sudden dip, and you'll need to be prepared not to panic if the price drops by a couple bucks. On the whole, I don't think there's much upside here in terms of the price, but you may gain a few bucks in stock price to compound your 6% dividend, to make for a nice profit.

Type of stock: The largest owner of movie theaters in America.

Price target: Now at $21, RGC is close to the high end of its 52-week (and even 3-year) range. I don't think there's much risk of losing a great deal of value if you buy now, but I'd suggest waiting until its next inevitable dip below $20, or even $19. My target price is $25 by mid-2007.

Hilary Kramer is a financial editor and money coach for AOL and an authority on investing. Visit her at www.hilarykramer.com.

While some energy companies are worried about dwindling reserves, Schlumberger Ltd (NYSE: SLB) stands to gain enormously as oil and gas become harder to find.

This company provides high-tech equipment and services to oil and gas companies, and its products are especially useful for the kind of unconventional drilling needed to find new sources. SLB is one of the top two companies in the world for just about every type of product and service it offers, and it invests heavily in R&D to maintain its competitive edge.

Not surprisingly, results have been very impressive over the past couple years. Growth in revenues and profits has been steady and impressive, and there's no reason to think this growth won't continue for the next few years. SLB's global focus gives it good protection against a downturn in any one region. Russia holds particular promise: The company has been working there for 50 years and now stands to benefit greatly from that country's rapidly growing oil business.

There are some risks -- oil is a cyclical business, and a company like SLB has high capital and R&D costs. The stock price has risen quickly and some analysts feel it is way overvalued. The longterm may be difficult as the world's economies try to conserve or adapt new forms of energy. But for the foreseeable future, oil and gas are only going to be in higher demand as China, India and other developing countries continue to grow and as the United States continues to rely on hydrocarbons.

Type of stock: A large-cap oil and gas services company, one of the leaders in all it does.

Price target: I believe that SLB (now at $60) will hit $80 in early 2007---as long as the price of oil continues its
ascent.

Hilary Kramer is a financial editor and money coach for AOL and an authority on investing. Visit her at www.hilarykramer.com.