Thanks in part to a savvy acquisition of GE’s fleet tracking division in early 2010, sales trends have slowly been on the mend. Revenue hit $25 million in 2010 and $45 million by 2012, and though they likely dropped a bit in 2013 (fourth-quarter results have not been announced), sales growth should exceed 25% in 2014, according to consensus forecasts. Equally important, those should be profitable revenues. Analysts anticipate earnings per share (EPS) of around $0.40.

A key catalyst for this stock: a current agreement with Avis Budget Group (NYSE: CAR) that has the potential to greatly expand in scope. Beyond that opportunity, the company appears to be landing new customers at a fast pace: In a call with analysts, CEO Jeff Jagid said: “In the third quarter of 2013, we received initial purchase orders from a diverse range of new enterprise customers, representing additional opportunities for growth, including one of the world’s largest industrial manufacturers, one of the world’s largest tobacco companies, a leading North American packaging manufacturer, a major U.S. dairy products producer, an international specialty logistics company, and the U.S. Defense Logistics Agency.” 

The key for this still-lagging stock is for I.D. Systems to deliver consistent quarterly results. If that happens, and management can make a clear case for solid top-line growth in subsequent years, then shares will start to garner a higher multiple. Applying a forward price-to-earnings (P/E) multiple of 30 to expected 2014 earnings per share would push this stock to $12, more than 100% above current levels. Why should such a high multiple be warranted? Because this business has stable fixed costs, and higher revenues in the future would help boost profits at an especially fast rate.

Unfortunately, thought that core business has been nicely profitable, Derma Sciences is spending heavily to develop a potentially game-changing wound-healing drug known as DSC-127, leading to overall losses instead of profits. The drug development process is so costly that the company recently found it necessary to dilute shareholders by raising more than $80 million in fresh capital. The good news: Some of those funds will also be used to expand a sales force that is focused on existing products and to give Derma the resources to make acquisitions. 

The real catalyst here is DSC-127, which will require some patience. Phase III clinical trials won’t be fully enrolled for another 12 months, and trial data won’t likely be released until the second half of 2015. Still, with ample cash on hand, and further intra-trial updates, this stock is likely to land on many more investor radars this year. And the ultimate value for this company may exceed $750 million if DSC-127 is a hit, representing more than 100% upside. Look for an update from management in mid-March.

Yet in recent years, Capstone has begun to fulfill its promise. Sales finally reached the $100 million mark in fiscal 2012, long after investors had initially expected such a revenue base. Yet analysts now see revenues reaching $175 million in the fiscal year that begins in April. Equally important, after a string of losses, Capstone is expected to reach break-even in fiscal 2015. 

Shares have moved up off of their lows in recent quarters, though further sales momentum — in the form of new contracts — can send this stock toward the $3 mark, representing almost 100% upside. That $3 price represents a multiple of five times projected fiscal 2015 sales.