With a market cap. of approximately $65M, this nursing home provider trades at roughly a quarter of its trailing revenues. Earnings have fluctuated, but last quarter it earned $.32 per share. At this run rate, Advocat should see modest upside. Operational improvements could drive much stronger advances, and with M&A activity rampant in the sector, a buyout is certainly possible over the next twelve months.

Air Industries has laid the groundwork for a strong push into the new year. The company plans on rolling up small, fragmented aerospace equipment manufacturers. Its a bit early to tell, but it looks like the company is executing well. At these prices, I like my odds.

In the past four years, Arrythmia Technology has made three moves from sub-$10 to over $30. Is another in store for 2008? I have no idea, but with the stock trading less than 11 times its annualized last quarter earnings, and about $1 per share in cash, HRT is very cheap for a medical device company.

With a share price of $6.90, over half of which is covered by cash on the balance sheet, earnings of $.24 last quarter, and a strong backlog, PTG offers a very high risk/reward setup. If I had to pick just one, this would probably be it.

One glance at the chart leaves no doubt that Synalloy is a volatile stock. Shares took a hit recently as Synalloy, a producer of specialty chemicals and fabricated metal products, lost the benefit of nickel pricing surcharges. But Synalloy remains solidly profitable, and should benefit from secular growth in energy and water infrastructure projects.