This column is for investors willing to take more risk and potentially receive more reward.  The stocks mentioned in this column are not recommended to buy or sell.  They're brought to your attention so you can investigate them further to determine if they fit your risk profile.  Most of the stocks will have less than $1 billion of market capitalization, have more volatility than other stocks, and oftentimes no earnings.  And some will have tremendous stories.

April 3, 2009 - BigBand Networks, Inc. (BBND-NASDAQ) develops, markets, and sells network-based platforms in the United States and internationally, principally in Asia, Europe and Latin America. The company's network-based platforms enable cable operators and telecommunications companies to offer video services across coaxial, fiber, and copper networks. Its digital simulcast product application enables service providers to create a digital version of analog inputs, and deliver analog and digital video streams to subscribers.

In addition, it offers switched digital video solutions that enable service providers to transmit video channels to subscribers only when the subscribers in a service group are in the process of watching those channels. Further, the company offers management software solutions that deliver digital video services, and enable service providers to optimize network deployments and operations.

The company's Server and Management Suite is an application for real-time control and management of video traffic traversing the network; and Switched Video Analysis is a viewership and performance analysis application that gathers metrics to allow service providers to make informed decisions about programming expansion. The company sells its products in the United States primarily through a direct sales force; and internationally through a combination of direct sales to service providers and sales through independent resellers. The company was founded in 1998 and is headquartered in Redwood City, California.

A couple things caught my eye on this stock. First, it's only been trading since early 2007. Shortly after going public, the stock went to $21.63. It cratered after that, hitting a low of $2.36 last year in October, along with the rest of the market. The price has rebounded but still a long way from the old high.

The next thing I noticed was the amount of cash in the bank. It's $175 million. That puts the current ratio (current assets divided by current liabilities) at about 3 to 1. And it gives the company a large cushion if times get too tough. Or the ability to buy other companies, start a dividend or buyback stock. Most likely the company will keep that capital in reserve until there's a rebound in the economy. For investors, though, it's comforting to see this much cash in a small company.

The next item that caught my attention was the strong rebound in earnings. While 2007 finished with a negative 52 cents a share, in 2008, earnings were in the black. The company reported 34 cents a share. For 2009, the consensus estimate of 7 analysts covering the stock is for 27 cents a share, then in 2010, up to 36 cents.

Revenues haven't been growing, but with the current economy that's almost a given. In 2006, they were $176.6 million. In 20007, they were $176.5 million. Last year, they grew to $185.3 million. This year, analysts see $194 million, then $213.59 million next year.

While still small, the company serves 6 of the 10 largest cable service providers in the U.S. Its customers include Cablevision, Charter, Comcast, Cox, Time Warner Cable and Verizon.

More numbers: Price to Sales ratio is 2.34. Price to Book is 3.12. Profit margin for the last 12 months was 5.2%. Total cash per share is $2.69. Book value is $2.14. Beta is .04. 52 week high for the stock was on April 24, 2008 at $7.96. Share outstanding are 64.9 million. Float is 40.53 million. Insiders own 41.46%. Institutions own 41.4%. There is no dividend.

This is a typical small-cap company in some ways. It has recently started trading, went down dramatically when the market collapsed, and shows great promise. Whether it can deliver on the promise (and it's started already by turning earnings around) will take time to discover. It's not cheaply valued at current prices. But it has strong potential as consumers demand more video on demand, and not just on their TV's.

Company Web site: www.bigbandnet.com

- Ted Allrich