10. Mesa Labs (MLAB)

The third company in our annual stock selection countdown is a relative newcomer to most of us — but a company that we’ve featured on multiple occasions.

Taxes on investments are (1) going up if Republicans and Democrats decide to agree on something or (2) if they continue to disagree across the board and over the cliff. In other words, taxes will increase on dividends and capital gains. One of the effects that we’ve been seeing for a while now is the traditional January Effect. The selection of Mesa Labs (MLAB) gives us a chance to reinforce a message that is always a good idea this time of year — and this year even more so.

We recently discovered MLAB through the annual publication of the Forbes Best Small Companies a couple of weeks before Halloween. It’s one of our favorite troves and you can read more about it here

It’s not unusual for the smaller companies to be more deeply impacted by tax-related selling during the final quarter of the year … leading to an event-driven opportunity to sell (when appropriate) all the while waiting to pounce on the ON SALE NOW opportunities created by the price swoons.

And quality matters. If we’ve learned nothing from watching the performance of these faster-growing companies over the last decade, it’s that we want to be vigilant for the leaders. We recognize them by steady, consistent growth and profitability patterns and balance sheets (financial strength) that are often a cut above their agile emerging peers. Last year’s favorite, SolarWinds (SWI) is up 130% over the last twelve months. We like that.

Mesa Labs (MLAB) was also featured as a recent monthly stock selection for December 2012

We also know that balancing the overall growth forecast FOR ANY PORTFOLIO is a really good idea … and after the selections of CVS and JW-A, MLAB provides a healthy boost in this regard.

Christmas Countdown Dashboard: http://www.manifestinvesting.com/dashboards/public/christmas-countdown-2013

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