A speculative pick due to its small capitalization, Chyron is providing its high tech services to the Olympic games,” says Leo Fasciocco.

In his Ticker Tape Digest – which focuses on buying fundamentally strong stocks that have scored technical breakouts from their trading ranges – he takes a look at this broadcasting graphics company.

“With annual revenues of $35 million, CGS is a micro-cap stock. The company was picked to provide over two dozen graphics systems to NBC during the network’s coverage of the 2008 Olympic Games.

“Utilizing the power of Chyron’s HyperX2 in both HD and SD and being the first broadcaster in the US to realize the potential of Lyric PRO 7, NBC will be broadcasting a massive 3,600 hours of programming during of the games.

“Utilizing the power of Chyron’s HyperX2 in both HD and SD and being the first broadcaster in the US to realize the potential of Lyric PRO 7, NBC will be broadcasting a massive 3,600 hours of programming during the period of the games.

The HyperX2 with Lyric PRO 7 will enable NBC to deliver both host and in-house looks by working in 2D, 3D, as well as using Apple QuickTime, Adobe XMP Metadata and Windows AVI files.

“Technically, the stock has broken out from an 11-week flat base, recently making a new high. Overall, CGS has been a top performing stock. For the past 12 months shows the stock has appreciated 80% versus a 15% decline in the S&P 500 index.

“The shares have risen from 2 four years ago to 6 — a triple. In remains in a bull market phase now. That is good confirmation that the breakout has technical support from buyers.

“This year, analysts predict a 67% jump in profits to 30 cents a share from 18 cents a share a year ago. The stock sells with a price-earnings ratio of 21. That is low given the earnings growth rate. Next year, the Street expects another 67% gain in net. That would carry the earnings per share to 50 cents.

“The stock’s institutional sponsorship is very good. Oberweis Microcap, which is very good with small cap stocks, holds a 0.40% stake.

“Overall, CGS is a speculative breakout in that the stock is thin and a small cap. It is most suitable for aggressive investors. We are targeting CGS for a move to $8.50 within the next few months.”

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