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.

July 15, 2011 - Layne Christensen Company (LAYN-NASDAQ) and its subsidiaries provide drilling and construction services and related products to the water infrastructure and mineral exploration markets.

Layne Christensen's Mineral Exploration division provides a range of drilling services for the mineral exploration industry. It offers above ground and underground drilling services, which include various phases of core drilling, diamond, reverse circulation, dual tube, hammer, and rotary air-blast methods.

The company's Energy division focuses on exploration and production of unconventional gas properties primarily in the mid-continent region of the United States. As of January 31, 2010, it had 586 net producing wells.

Additionally, Layne Christensen offers specialty energy services. The company provides services to municipalities, investor-owned water utilities, industrial companies, mining companies, consulting and engineering firms, heavy civil construction contractors, oil and gas companies, and agribusiness.

What caught my eye about LAYN was earnings. They're rebounding strongly after a tough 2009 when EPS went to 90 cents a share, well below the $2.20 recorded in 2008. Last year, they finished at $1.53. For 2011, 2 analysts have $2.07 as the target number with 2012 coming in at $2.15. In the first quarter, earnings were 51 cents a share, well above the 34 cents of last year's first. 15 cents of that gain was from a one time sale of a facility. In the last 4 quarters, the company beat Street estimates by 17.9%, 40%, 25% and 82.1% respectively.

Sales are ramping. First quarter results (fiscal year ends in January) showed a 16% increase to $267 million. Two out of three units saw solid gains: Mineral Exploration and Water Infrastructure while Energy decreased slightly. For the full year, 4 analysts have a consensus estimate for revenues of $1.09 billion, up 6% from 2010. For next year, they see $1.16 billion, 6.9% higher.

Orders keep pouring in for the Mineral Exploration division and Water Infrastructure which bodes well for top and bottom line growth for the next several quarters at least. Don't expect much from the Energy group for a while as sales are forecast to be tepid but not enough of a negative to slow growth rates for revenues and earnings.

Essential numbers: Market Cap is $589.22 million. Trailing P/E is 16.2. Price to sales ratio is .56. Price to book is 1.15. Book value is $26.43. Operating margin for the last 12 months was 4.05% and Profit margin was 3.43%. Return on equity was 7.76% and Return on assets ws 3.33%.
Total cash is $47.31 million for $2.41 a share. Total debt is $41.87 million. Debt to equity is 8.04%. Current ratio is 1.53. Beta is 1.5. The stock is up 21.36% in the last 52 weeks. There are 19.63 million shares Outstanding with a Float of 18.91 million. Insiders own 2.89% and Institutions have 88.10% of the Float. There is no dividend.

After the first quarter report, LAYN shot higher, reaching $38 before the genral malaise of the market brought it down. It's starting to firm again. With a large improvement in earnings expected for this year and orders piling up, it may be a good time to study this stock closely to see if it fits your investing parameters.