Stocks Not Out of Reach Even for Modest Tax Refund

Don't have enough refund cash to buy individual stocks?

Not true, McGee!

Even a modest tax refund can cover 100 shares of some excellent companies, says Jonathan Steinberg, editor in chief of Individual Investor magazine and author of "Midas Investing" (Random House).

Mr. Steinberg should know. He has won The Wall Street Journal's stock-picking contest six times.

Small stocks = cheap stocks

"The great majority of small-cap stocks are now [selling] at the low end of their trading range," he says. Yet, many offer products and services that should perform well over time.

Small-cap firms are usually companies with stock market capitalization ("stock price" multiplied by "the number of shares outstanding") of less than $1 billion.

Stock investing always carries risk, Steinberg says, and small caps carry a disproportionate amount. Research before you buy. Ask your broker for help finding information on the companies.

Steinberg picked five possible winners, all less than $10 a share on the Nasdaq National Market, with potential for solid gains over time. Ticker symbols are given in parentheses.

1. THQ (THQI). Develops and publishes entertainment software for video games. About $7 a share.

2. National Vision Associates (NVAL). This low-cost seller of eye glasses operates at 340 Wal-Mart stores. About $5 a share.

3. Uromed Corp. (URMD). The company makes a health-care product for women. About $7 a share.

4. Geographics Inc. (GGIT). Its value-added wrapping papers have been picked up by many US retailers. About $3.75 a share.

5: Macrochem Corp. (MCHM). A biotech company with a $90 million market value. Less than $10 a share.

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