#-ad_banner-#If you can handle risk, I’ve found a potentially very lucrative investment idea for you — a stock that could triple your money, or better, in the next three to five years.

The stock’s risky for a couple reasons. First, it’s a small cap. As you probably know, companies with small market capitalizations tend to have less certain futures than much larger firms because they just don’t compare in terms of scale, financial strength, product diversity or name recognition.

Second, it’s a tech stock. These stocks can be riskier and more volatile, especially the smaller ones, because they’re often objects of investor speculation. And, technology can advance so rapidly that even very new products may quickly become obsolete.

Like a lot companies, this one has had a tough time recently. Last year was its first profitable one in several years, thanks to the recession. But it has gotten off to disappointing start this year, reporting first-quarter sales of $43.5 million, a 28% decline from $60.2 million in the prior quarter.

I think that’s all in the past, though. The future is what makes Anadigics Inc (Nasdaq: ANAD), so interesting and potentially so profitable for investors.

 

Anadigics is a top supplier of smaller, faster, more energy-efficient computer chips,  called radio-frequency integrated circuits, to three fast-growing markets: wireless fidelity (Wi-Fi), third-generation (3G) smartphones and community-access TV. Analysts expect the design and production of smartphone chips for major 3G players like Samsung and Research in Motion (Nasdaq: RIMM) to be an especially strong source of future revenue.

Anadigics should generate healthy long-term profits in the 3G market and will be set to do the same in 4G as the wireless industry begins to adopt that technology, which may help to complete the transformation of mobile devices into full-fledged computers. Together, 3G and 4G networks are projected to make up 30% of the global wireless market within five years, compared with 11% last year.

The company also plans to enhance its cable-related business through expansion of the broadband lineup, even though such products may become largely obsolete as wireless technologies gradually replace DSL and cable modems. Anadigics’ latest contribution to the transition, introduced on Feb. 3, was a power amplifier for WiMax (worldwide interoperability for microwave access) and other wireless 4G devices. In the meantime, Anadigics will be positioned for high revenue in the broadband segment, which is expected to rebound in the next several quarters from a protracted slump precipitated by the recession and excess inventory. The firm is likely to start seeing strong orders in that segment this year, probably later in the second half, analysts say.
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So don’t be surprised if Anadigics posts a loss in the first half of 2011. It already did in the first quarter, for $0.16 a share. Full-year results should be in the black, though, setting the stage for a strong run through 2016. Analysts are already forecasting 2012 sales of $265 million, an 18% improvement over the 2011 estimate of $225 million. Earnings are projected to rise an astonishing 300% from $0.05 per share in 2011 to $0.20 a share in 2012. Analysts predict earnings growth will average a robust 16% a year for the following four years. Until then, there’s nearly $70 million in cash on hand to tide the company over. Its current ratio is 5.56, indicating it can quickly pay off all short-term debts more than five times over.

Action to Take–> At about $3 a share, Anadigics is trading at book value. Said another way, the company is trading for right around the value of its assets and nothing else, including any future business. The stock is near a 12-month low, so it’s a great time to buy. Analysts say the stock could go as high as $15 in the next five years, good for a 400% gain. But that’s the most optimistic projection. Five-year growth of 200%, to $8 or $9 a share, is probably a more realistic estimate.

Again, there’s plenty of risk here. The stock has a beta of 2.08, meaning it’s more than twice as volatile as the overall market. In the past year, the price has been as low as $2.94 and as high as $8.20. Sometimes, the stock swings by double digits in a single day. So be absolutely certain you can tolerate that sort of volatility before investing.

P.S. — We’ve just identified six surprising events that could break your portfolio wide open in 2011. Knowing these pivot points in advance lets you focus your investing strategy like a beam of light in the dark… and make a lot of money in a hurry. Get them free by simply watching this video presentation.