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.

May 27, 2011 - Capital Trust, Inc. (CT-NYSE) operates as a real estate investment trust in the United States. It specializes in originating and managing credit sensitive structured financial products. The company makes investments for its own account, as well as manages a series of private equity funds on behalf of institutional and individual investors.

The company also finances single properties, multiple property portfolios, and operating companies. It has elected to be taxed as a real estate investment trust and would not be subject to federal income tax, if it distributes at least 90% of its taxable income to its shareholders. The company was founded in 1966 and is headquartered in New York, New York.

Dear readers: this one is not for the faint of heart. The stock traded at 80 cents a share in 2009. In 2008, the company lost $3.01 a share, but the next year, was a shocker: the losses totaled $25.66 a share. In 2010, the ink was still red. Earnings showed a loss of $8.42. To further add to the danger: this is a very small cap stock with a Capitalization of $100 million. If you want to proceed, do so with caution.

OK, those are the red flags. Here are some of the green ones: Earnings will change color this year to black. Estimates are for 90 cents a share. Next year, expect $1.00.

This turn of fortune is due to restructuring of CT's borrowings. In March of 2009, the company was able to lower its interest costs for 2 years through a refinancing. When that period ended, real estate hadn't rebounded well enough for CT to sell some of its real estate at a profit, or even close to break even. So it had to restructure once again. This time it shifted assets to another subsidiary and borrowed against those. That gave the company the money needed to pay off the first obligation in a timely manner.

CT stepped into commercial real estate quick sand in 2007 and 2008. It bought lots of commercial buildings with new debt. The timing couldn't have been worse. Values went almost straight down for those years and partly into 2009. With its portfolio underwater, it had to refinance or lose not only properties but most of its equity.

Now the market has revived, valuations are higher, and while the company had to give up part of its ownership to refinance the latest round, it has the money needed to survive and hopefully thrive. Currently, stockholders' equity is expected to end 2011 at negative $3.25. At the end of 2010, it was in the red by $18.76. As of March 31, 2011, adjusted book value was a positive $3.93. (Click Here for the latest quarterly release)

Essential numbers: Almost all normal valuations are not available due to losses last year. However, some numbers are still pertinent: Total cash is $24.45 million or $1.11 a share. Total debt is $4.26 billion. Current ratio is 7.47. Beta is an extreme 2.42. In the last 52 weeks, CT is up 190.39%. The 52 week low was $1.01 on December 1 of 2010. There are 21.94 million shars Outstanding with a Float of 14.87 million. Insiders own 39.68% of the stock. Institutions have 9.4% of the Float.

This one is only for the most aggressive investors. There are so many risks involved that even they should be wary. But this is a stock that traded at $56 only a few years ago. Then the commercial real estate nightmare became a reality, and the stock went to 80 cents. With its new refinancing in place, CT has a chance of recovering, even paying a dividend. But if the commercial real estate market dives again, look out below.