My 2 Favorite Stocks for This Week

The stock markets continued their upward trend last week, with just a little volatility. Indices were aided by the great numbers posted by Michigan Sentiment, which came in at 76.2, compared to the 74.3 forecast.

As well, GDP (third estimate) remained steady at 3%, and personal spending rose. While unemployment claims were a bit higher than expected, they weren�t too far off the mark. The result: a decent end to the week.

Sector-wise, technology ruled the roost, with an average return of 1.07% for the week, followed by health care, at 0.9%.

The market continues to look undervalued to me, and my search this week found more than 40 companies that were worth a second look. Here are two of my favorites:

Glu Mobile

Glu Mobile (NASDAQ:GLUU) develops mobile games for the global market. Titles include Big Time Gangsta, Blood & Glory, Bug Village, Contract Killer, Contract Killer: Zombies, Eternity Warriors, Frontline Commando, Gun Bros, Men vs. Machines, Stardom: The A-List, Super K.O. Boxing and Toyshop Adventures.

Price: $4.80
Market Cap: $314.44 million
Target: $7.00 (conservative estimate)
Why I Like It: Discounted value, takeover candidate and new analyst interest.

Merge Healthcare

Merge Healthcare (NASDAQ:MRGE) sells software solutions that automate health care data and diagnostic workflow.

Price: $5.85
Market Cap: $534.23 million
Target: $8.75
Why I Like It: Reported a good quarter, forming new business divisions, in a quick-growing sector, due to the need to create electronic patient records.

These stocks are both small caps, so please understand that investing in them might entail more risk than buying shares in their larger competitors. Consequently, if you decide to purchase them, please make sure that they constitute only a small portion of your portfolio.

Note: I intend to establish a portfolio of similar picks, some 25 to 30 stocks that I�ll update on a regular basis. I will discuss them from time to time in my blog and on this website, but a full analysis of each stock — as well as detailed updates — will be available only via subscription. If you�d like more information, just contact me directly, at nzambell@frontiernet.net.