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Its no secret that Washington DC is a cauldron of corruption, vice, waste and dishonesty. But a small building just 10 blocks from the White House is home to what might be the biggest boondoggle in DC history. You see, a secretive group of congressionally appointed officials are busy at work producing endless reams of reports. Many of these reports, which I refer to as 'Folios' with my fellow analysts, look like any other example of pointless Government paperwork with one small exception the information in these Folios could make small stock investors a handsome amount of money. That's because most small stocks - those companies with market caps below $1 billion - are not closely followed by the broader investment community. Much of the information relevant to their business, and share price, is simply unknown. But not to a small stock analyst who spends most of his time sifting through reports to find the nuggets of information that will lead to multi-bagger returns. What's crazy is that these Folios are available for your viewing - it's just that most people don't take the time to read them. They are filed by thousands of companies every day with the Securities and Exchange Commission (SEC). You can find them yourself on the SECs website they are more commonly known as Form 8-Ks and 6-Ks. What do these documents contain, and why are they such catalysts for a publicly traded small stock? From the SEC's website... "Form 8-K is the current report companies must file with the SEC to announce major events that shareholders should know about."

These 'major events' include mergers, financial information, significant press releases; the list goes on. The Form 6K serves the same purpose, but is used for foreign companies that trade on a U.S. exchange.

The thing is most investors don't spend their time sifting through these forms for several reasons: 1) Theyre extremely dry and filled with legal jargon 2) There are literally thousands of forms filed daily, which means tons of manual work 3) The useful information is often buried amid the legalese But here's the thing - if you know which companies you should be watching, and then monitor their filings for meaningful events, you'll have an edge. Digging through these forms for the relevant information is what I do. Its my area of expertise. Its not glamorous or easy. But it can be exciting - especially when you find the kind of real catalysts that point toward significant growth for a company, and its share price. Ive done that work specifically for this report for investors like you who want a real chance to multiply your wealth with the best potential growth candidates in the small stock sector. In this report I detail three companies that, using our 'Folio' strategy to time purchases, give investors the chance to seize outsized gains. By anticipating positive catalysts before they happen, then taking decisive action at the right time, subscribers are able to enjoy huge gains in the stock when the rest of the crowd finally catches on. I also give you detailed analysis of these companies profitability, growth prospects and the positive catalysts I anticipate will make the difference in your portfolio. So when these companies file their own 8ks and 6ks, you'll be able to quickly differentiate between the useful fact and the legalese. It bears repeating that I wouldn't hesitate to 'buy and hold' any of these companies. In fact, I currently own shares of two of these companies because I believe they are solid growth companies - but all three have multi-bagger gain potential over the coming years. We've used this strategy in Small Cap Investor PRO for some time now. Take a small silver mining company in Mexico Id been researching in 2010 called Endeavor Silver (AMEX: EXK). I followed this company for months because I knew they had silver - lots of it. Even if Endeavor was able to mine a fraction of their known silver reserves, theyd be an easy double. The catalyst I was looking for was increasing silver production. In June of 2010, a one page 6-K 'Folio' was filed with the SEC that said, Endeavour Silver Drill Program Intersects High Grade Silver-Gold Mineralization

It took a little longer than I expected, but Endeavor turned into a near triple in less than one year. Another stock I was watching at the time is Allot Communications (ALLT). It couldnt be more different from Endeavor. Allot sells network management hardware all around the world. Its headquartered in Israel. I recommended this company anticipating that its technology would catch on, and help it become a truly profitable company. At first, Allot actually went down a few percentage points, but then:

Since I first noticed how 6-K and 8-K filings outline small stock catalysts - in particular ones that take a while to get noticed by the broader investment community - I've begun using them to help guide investment decisions. My favorite stocks to be on the lookout for future catalysts are currently Fortuna Silver, Inventure Foods and Banro Corporation. When these companies file relevant 8K and 6K forms, the market will begin to realize what I, and my subscribers, already know...that our anticipated catalysts are having the desired effect. Let's dig into the details of these stocks because you need to know what you should be buying before you take action. But first, one thing about buying these small companies right now: I always recommend you watch any stock, particularly small stocks, and look to add shares in multiple positions on weakness. This is called 'dollar cost averaging' and allows you to lower your overall cost basis if the stock falls. Use this strategy when you invest or trade penny stocks - it works. Fortuna Silver Mines - A Game Changing Expansion in Mexico Fortuna Silver Mines (NYSE: FSM), (TSX: FVI) is without a doubt one of my favorite silver mining companies. The catalyst I've been expecting to move this stock higher is the opening of the company's second major mine; the San Jose Mine in the silver rich Sierra Madre Mountains of Mexico. Silver production at the San Jose mine began on September 1st, 2011 and it is now Fortuna's second mine. One of the things I like about Fortuna is that while it qualifies as an 'emerging producer' because of the new San Jose mine, management still has years of experience opening and operating a successful mine. The company's first flagship mine, Caylloma, is located in Peru. It purchased Caylloma in 2005, upgraded the plant, and increased production by 150 percent. I first recommended Fortuna to subscribers in April of 2011 anticipating San Jose's opening. Since I've covered the stock other favorable catalysts have helped, including a new listing on the NYSE in addition to the company's listings in Frankfurt, Germany and Toronto, Canada. Confirmation that San Jose remains a huge catalyst was confirmed in the details of a Form 6K filed on October 24th, 2011. This form detailed 3rd quarter silver production. Keep in mind, while I generally expect our catalysts to have an almost immediate impact, the real exciting part of the story is the longer term, i.e. 12-month, time frame when I expect shares to deliver the biggest gains. I'll get to the details of this form in a second, but first a little background on Fortuna. The company has been growing revenues, profitability, and production for the last two years at Caylloma. In 2010, it generated $74.06 million in revenues and earnings of $0.12 per share.

Fortuna has around 20.3 million ounces of silver and 70,900 ounces of gold left at Caylloma enough to keep production going for at least another decade without any further exploration work. While Caylloma is a tremendously valuable asset, the major catalyst for this company's stock is not in Peru. It's in Mexico. I already stated that in September 2011, Fortuna opened its new San Jose mine. The future silver production from San Jose is a game changer for Fortuna, as the production forecast in this chart shows. With just one quarter of production left in 2011, management expects San Jose to produce around 780,000 ounces of silver equivalent (this includes gold production too). Production will skyrocket to over 2.6 million ounces of silver equivalent in 2012 with a full year of mining operations, and grow to over 5 million ounces in 2017. That's a lot of silver at just one site for a company with a market cap of only $814 million. Its this San Jose Project that makes Fortuna such an attractive silver developer right now. Silver companies that are already producing and are rapidly expanding production to take advantage of higher silver prices right now are likely to be some of the best performing stocks in the market. In the Form 6-K 'folio' filed on October 24th, Fortuna stated that San Jose contributed just one month of production in the last quarter, and it was a fairly modest 113,178 ounces at that. We also learned in the November earnings release that only 21 percent of what was produced from San Jose was actually sold in the quarter. So there is a huge amount of room for revenues and earnings to ramp higher as silver production at San Jose increases to more than 4 million ounces annually. Add in potentially higher silver prices and we have huge leverage to silver with San Jose. Looking at both mines in the third quarter of 2011, silver production was up by 40 percent to 660,749 ounces compared to the third quarter of 2010. Most of these, around 560,000 ounces, came from Caylloma. With an average selling price of $35.16 per ounce, Fortuna's revenues rose 80 percent over the third quarter of last year. Even better, net income was $10.31 million, a huge improvement over a loss of $770,000 last year and operating income surged to $14.89 million from $1.03 million. The company now sits on $62.73 million in cash.

Simple math shows that production should more than double in the fourth quarter of 2011 with San Jose adding over 600,000 ounces to Caylloma's 560,000 ounce production. Looking forward, in 2012, Fortuna plans to produce 2.75 million ounces from the San Jose mine. At this year's average silver price, this production is worth around $100 million in revenue. Keep in mind Im only talking about revenues generated from the San Jose project - in 2010 Fortuna generated $74.06 million from the Caylloma, Fortuna's Revenue Sensitivity to Average Peru mine alone.

Silver Price

So revenues could more than double in the next year, just based on current production plans and stable silver prices. With the production forecast that management provided, we can forecast a few scenarios of future revenues by 'plugging in' a few average silver prices. I've put this analysis in a chart to make it easy to digest.

$800,000,000 $700,000,000 $600,000,000 $500,000,000 $400,000,000 $300,000,000 $200,000,000 $100,000,000 $0 2010 2011 2012 2013 2014

$20 Silver

$40 Silver

$60 Silver

$100 Silver

The chart shows possible annual revenues for each of the next three years given four average prices of silver. Let's assume silver averages $40 per ounce in the future. Assuming Fortuna hits its production guidance revenues will rise by 100 percent in 2011. In 2012 they will have increased by 300 percent over 2010. In 2014, when San Jose is up to full capacity, revenues will have increased by 400 percent over 2010. These are pretty attractive numbers. Granted we don't know what the average price of silver will be, but all of these numbers show that Fortuna should enjoy robust revenue and earnings growth, even if silver prices stay flat. The bottom line is that Fortuna's production growth from the San Jose mine gives investors excellent exposure to silver prices, and thats why I like the stock. To value the stock we also want to look at the value of the company's assets. Right now, assuming a conservative price of $30 silver, Fortuna's stock is selling at a discount to net present value of its silver assets in the ground. Valuing these assets at $30 silver (keep in mind this is below the current price of silver) suggests the stock should be trading at closer to $6.75. I think this valuation is fair right now, but will soon appear conservative if silver prices stay where they are, or rise even more. Accordingly, my medium term price target on shares is $7.40. Longer term, I expect this stock has the potential to double, or more, as forecasted production comes on line.

In fact, I'll be updating my numbers as soon as Fortuna files another production forecast and San Jose progress update, which I expect in the fourth quarter of 2011. It appears were seeing the glory days for silver production in Mexico, and I think we can expect great things to come from Fortuna. As with all mining operations, execution to plan and conservative fiscal management is crucial. All evidence to date suggests Fortuna will continue to meet my expectations. The stock is a buy at current levels, and bigger positions should be added on any material weakness. Read my in-depth research report on Fortuna Silver at www.SmallCapInvestorPRO.com. Price Target: $7.40 Full disclosure: Tyler Laundon own shares of Fortuna Silver Mines Snack Food Company = Defensive Growth Inventure Foods (Nasdaq: SNAK) is a consumer goods company that sells packaged snack foods and frozen berry products to club stores, convenience stores and grocery retailers - think Safeway (NYSE: SWY) and Costco (Nasdaq: COSTO). These types of products are purchased in good times and bad, and these stores are always packed full of hungry shoppers looking for great values. And Inventure Foods has a smart strategy; it is selling products in both the fast growing 'Healthy & Natural' category as well as the old standby 'Indulgent' snack food category. Inventure Foods is insulated from oil prices, foreign currency fluctuations and sovereign debt exposure. Yet defensive doesn't mean zero growth for this micro cap snack food company. In the third quarter results - released in an 8-K on October 26th - reported sales grew by 10.1 percent year-over-year. Buying this stock right now still gives you exposure to the lions share of the upside as more and more investors start taking notice. Growing demand for healthier snack foods - as well as regulations to combat obesity - is well documented. The Organic Trade Association's (OTA) data shows over 2,500 percent growth in organic food demand over the past 20 years. Additionally, California, a number of cities in Maryland and Connecticut, New York City and Philadelphia have moved to ban unhealthy trans fats in restaurants. Inventure Foods is growing its exposure to this market with its Healthy & Natural products which include frozen berries, smoothies and snacks. After growing sales in this division by 27 percent in 2010 these products now account for 55 percent of sales - a huge jump from 4 percent of sales in 2006. This segment's brands include Rader Farms, Jamba Juice smoothies (in partnership with Jamba (Nasdaq: JMBA)), Boulder Canyon and a host of private labels. Frozen foods, including Jamba, grew by 20.3 percent in the third quarter.

But while I'm a fan of healthy product offerings, I also know that consumers dont always want to go the healthy route when snacking. Inventure is going after the less than healthy market too, which it calls 'Indulgent Specialty'. Here it sells under national licenses, regional brands and private labels, and you'll see their products, primarily chips, onion rings, and pretzels, sold under the TGI Friday's, Nathan's, Burger King, Poore Brothers, Tato Skins and Texas Style brands. Indulgent Specialty makes up the remaining 45 percent of sales, and grew by 7 percent in 2010. Inventure Foods seems to be firing on all cylinders right now. The company is growing its shelfspace in convenience stores, vending machines, and internationally. Healthy & Natural revenues are up with the popularity of both Jamba At Home Smoothies and Rader Farms berries helped by national advertising efforts at NASCAR events, with cooking guru Rachel Ray and on the Food Network. Earlier in the year, after Inventure Foods reported second quarter revenue that came in 9.3 percent above expectations, analysts bumped up their revenue forecasts. Expectations are now for the company to deliver 10 percent plus revenue growth and nearly 100 percent earnings growth in 2012. This chart shows revenue trends - note steady growth even through the latest recession in 2008 - 2009 and the nice uptick in revenues over the last twelve months (LTM). So far, with revenue growth of over 10 percent in the last quarter, Inventure is on track. You'll notice in the chart above that optimism on top line growth is somewhat tempered on earnings, which will be essentially flat in 2011. This is because significant investments to expand distribution and marketing of Jamba and Boulder Canyon brands, including shelf-stocking, advertising and coupons, and frozen berry inventory is cutting into the company's profit margin. Management is extremely transparent in explaining these investments however, and I'm pointing them out not to call a strike against the company but more to give a little insight into its growth strategy. A consumer goods company can't gain shelf-space and 'clout' without getting the word out and expanding distribution - and that is what Inventure Foods is doing through these investments. It has to pay in advance for the shelf-space, which it is doing now. This in effect 'front-loads' the costs of future revenues - I'll spare you the boring accounting analysis and simply state that it is a more conservative, and therefore better, way of doing business.

If management is successful, which I expect it will be, we should see these investments hit the bottom line in 2012 with earnings of around $0.30 per share - that would be more than 100 percent higher than what we expect in 2011, which is EPS between $0.12 and $0.14. This will be worth the investment. Shares of Inventure Foods are currently trading just 13-times 2012 estimated earnings of $0.30 per share. Shares could trade up to 18.5-times 2012 EPS if earnings growth hits 100 percent, which equates to a share price target of $5.55.I believe Inventure Foods is exactly what a longterm small cap investor is looking for right now. A defensive growth company that is somewhat insulated from economic woes, that sells a product consumers want in good times and bad, has shown an ability to tap into growth trends on its own and through strategic partnerships like Jamba. Be sure to average in to Inventure because the stock trades an average of only 40,000 shares per day - so bide your time and be patient when purchasing your first tranche. Read my in-depth research report on Inventure Foods at www.SmallCapInvestorPRO.com Price Target: $5.55 Banro Corporation - First Mover Advantage in The DRC In some areas of the world there are ample supplies of precious metals that have not been accessible for decades. Either they are far too remote, short seasons make mining operations impractical, stable governments have yet to be formed or technology just isn't yet available to make mining these reserves economical. Yet as the price of gold rises, so too does the motivation to go after these reserves. Banro Corporation (AMEX: BAA) is one of the first companies to enter a true emerging country; the Democratic Republic of Congo (DRC), Africa. Its head start over other gold exploration and development companies means that it has some of the best property in the country. Banro is an excellent example of a low cost gold producer that has moved quickly from exploration to development to production. This is key - miners on the cusp of revenues are in my opinion the best value in the market. It entered a resource rich country in central Africa soon after relative political stability came to the region. A transitional government and constitution was adopted in 2003. In 2006 the DRC held its first multi-party election, which was supported and considered credible internationally, in 40 years. Currently, companies such as Freeport McMoran (NYSE: FCX), Lundin Mining (LUN.TO) and Anvil Mining (AVM.TO), along with Banro, are succeeding in the DRC.

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The DRC has been growing at about 7 percent in recent years on the back of natural resource exports like precious metals and timber. It is the 11th largest country in the world, and the second largest in Africa. It's a hot spot for mining because over time shifting tectonic plates in the Great Rift Valley have exposed huge amounts of gold, copper, silver, diamonds and numerous other minerals. This is why Banro is here. Since it entered the DRC, Banro has reconstructed roads and bridges, purchased and installed a gold processing plant, developed a mine, built schools and housing for local workers and secured financing to put its mine into production. In a 6-K filed on October 11th, Banro stated that its Twangiza gold mine poured its first gold - a major milestone that management has been working on for two years. The big picture at Twangiza is around 6 million ounces of gold. Banro acquired theTwangiza project in 1996. The decision to bring the property into production was made in 2009 and in order to fast track the project the company focused on what it's calling 'Phase One'. Phase One will focus on the easily accessible gold deposit and production of 120,000 ounces annually. The economics of the project are as follows; total gold production of around 1 million ounces over 7 years. At this rate the cost per ounce will be just under $400 and the initial capital coast is $87 million. The first stage of the project has a net present value over $1 billion using a 5 percent discount rate and gold's current price. Costs of only $400 per ounce means Banro's Twangiza project should be a cash cow. Even if gold were to average only $1200 per ounce over the life of the mine (unlikely in my opinion) Banro would generate $850 in positive EBITDA for each ounce it brings to market. That's a very healthy margin that will provide tremendous growth capital to increase production to a proposed 300,000 ounces annually, and bring additional mines on other properties into development. Second in Banro's development pipeline is the Namoya project, followed by Kamituga and Lugushwa which are currently exploration stage properties. Namoya has around 1.7 million ounces of estimated gold, and development plans call for annual production of around 124,000 ounces of gold annually for seven years, at a cost of $350 per ounce. Estimated capital costs to build the mine are $118 million. This project would in effect double Banro's gold output and revenues over the period of the project. Given the size of its reserves and gold at over $1,700 the stock is superbly undervalued. With potential for nearly a billion dollars a year in revenues and a low cost per ounce Banro should be

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either extremely profitable or extremely well financed to expand further - or both. Any gold price above $1,200 makes Banro a good buy for under $4.50 per share. I've added up all the ounces of gold Banro has on its four properties, based on the most recent estimates, and put the totals in the table below.

Right now the market is giving Banro about $100.00 in enterprise value per ounce of gold (I call this EVPO) in the measured and indicated categories. Given that these ounces are at the more advanced Twangiza and Namoya projects this appears a pretty significant discount. I've seen other companies valued at many times this level for similar resources. Add in the inferred resources and take a total average, and Banro is getting just over $60.00 in EVPO. Senior gold producers enjoy similarly categorized ounces valued at hundreds of dollars per ounce on an EVPO basis. With Banro ramping up production, in coming years it should enjoy a similar valuation. Banro should be able to trade at and EVPO of $250 for gold in the measured and indicated category. That makes the stock a potential double, so we'll put a price target on shares of $8.40. The bottom line is that Banro will rapidly be increasing production at its first mine, and has a well defined and very reasonable expansion plan that it should be able to largely fund with operating revenues. The company has an additional $30 million in cash on the balance sheet to help expand production. It is also drawing investment dollars from institutional owners (institutional ownership is around 60 percent) like Oppenheimer (NYSE: OPY), JP Morgan Chase (NYSE: JPM) and Deutsche Bank (NYSE: DB). We'll enter this position with institutional investors and ride the wave through the start-up of the mine and into full scale gold production. Read my in-depth research report on Banro Corporation at www.SmallCapInvestorPRO.com Price Target: $8.40 Full disclosure: Tyler Laundon own shares of Banro Corporation

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