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• The Best Performing Small-Cap Stocks of July 2010 -- Where Are They Headed Next?

• ALIM 100% Rate It
• AMZN 81% Rate It
• EPS 0% Rate It
• HRG 100% Rate It
• REFR 100% Rate It

We'd all love to find a way to find that +1,000% gainer. To capture this kind of upside, investors will have to take their chances on companies that may have a great future but little to show for it right now. These speculative plays, more often than not, fail to pan out. They often serve as vehicles to separate investors from their money -- diluting whatever stake they had by serially raising money to stay afloat.

But we wanted to take a closer look at the most speculative stocks on the market by running a screen for companies that were valued at more than 100 times their trailing sales. The vast majority of companies we found were either investment firms (that can logically have no sales if they are just a holding company), commodity exploration firms (which are likely sitting on valuable land -- even if they have derived no revenue yet), and biotechs (which have a good excuse for having no sales if their developing drugs are not yet on the market). We eliminated all of those stocks and are left with what you see in the table below.

As you can see, some of these companies are valued at a few hundred million bucks, even if they are little more than a hope and a dream. For example, Harbinger ( HRG ) "intends to identify and evaluate business combinations or acquisitions of businesses." Right now, Harbinger is sitting on $150 million in cash and is valued at about $125 million. You can gamble on this company if you blindly trust that management will do something wise with that money, but that's what roulette tables are for.

Several companies on this list are seemingly stuck in the dot-com era, hoping to strike it rich with a hot new technology in the areas of software, telecom and the Internet. For example, ICO Global (Nasdaq: ICOG) hopes to provide high-speed wireless services using its proprietary satellites. The company goes through about $40 million in expenses a year, year after year, and has yet to land a single customer.

The dubiously named Kaching Kaching (Nasdaq: KCKC) aims to become "the world's largest online shopping community and retail chain." Amazon.com (Nasdaq: AMZN) isn't shaking in its boots quite yet. According to Reuters, this little company already has 85 million shares outstanding. That's a lot of shares to spread over a revenue base of a few hundred thousand dollars.

A treatment for diabetes-related blindness
Some companies on this list appear to be on the cusp of real promise -- and a meaningful spike in sales. For example, Alimera Sciences (Nasdaq: ALIM) is quite close to bringing a key new medical device to market. The company's Iluvien product is an insertable tube that delivers steroids right into the eye for those suffering from diabetes-related blindness.

Since going public in late April, Aliemra has hit all the milestones investors had been expecting, but shares have fallen roughly -30% from the $11 IPO price. Trading volumes have steadily fallen as investors have seemingly forgotten this new company. But that could soon change as the company gets past the final FDA hurdles.

In late June, Alimera filed a New Drug Application ( NDA ) with the FDA. The FDA is expected to give the device "fast-track" status some time in August or September. Across the pond, Alimera filed similar applications with European drug regulators. Now it's a question of if -- and when -- the United States will grant regulatory approval. Analysts believe approval should come late this year, with sales beginning in the first quarter of 2011. And it could be a quick sales ramp. Smith Barney believes sales could reach nearly $300 million by 2012, noting that no other approaches exist to treat this fast-growing problem.

If Alimera can hit that sales target, then earnings per share ( EPS ) could approach $2. Yet shares linger under $8. That tells me that some investors believe either FDA approval is unlikely, or that actual sales and profits could be well lower than those forecasts. There is one other possibility: that this is a completely off-the-radar stock. If that's the case, shares could rise sharply when Iluvien is approved, perhaps later this year.

A star is (hopefully) born
For an unproven company, Star Scientific (Nasdaq: CIGX) sure has received a lot of ink lately. The company has developed a process that removes many harmful chemicals from tobacco that are often introduced in the curing process. The company has also developed a smoking-cessation product that is aimed at slowly weaning tobacco consumers from any nicotine addiction. Some investors are also abuzz about the company's potential treatment in the field of Alzheimer's.

But Star Scientific has disappointed investors many times before. If you look back over its historical stock chart, you'll find many instances of sudden surges and sudden plunges. In the last two months, the stock has perked back to life, and on Monday, it tacked on another +15% on unusually strong volume as rumors spread that the company would be soon bought out for a fat premium. Maybe it will happen. But if history is any guide, a rising stock price has been a good time to take profits in this speculative name.

The king of the speculative stocks
To my mind, no company better epitomizes the speculative stock universe than Research Frontiers (Nasdaq: REFR) . The company has developed a "smart glass" that can automatically tint when exposed to the sun and might eventually be used in airplanes, cars and office towers as a way to save energy. To its credit, the company has attracted interest -- and contracts -- from several large partners like Japan's Hitachi. Trouble is, those deals have yet to turn into meaningful sales growth. So Research Frontiers goes back to investors every year for another capital injection, implying that the coming year will bring great things.

Yet hope springs eternal, and right now it's springing again. Shares have steadily risen from around $3 in early June to a recent $4.90. The message boards are buzzing with talk of an imminent announcement that will send shares higher. Then again, those boards have been abuzz many times before -- with nothing to show for that chatter.

Action to Take --> Some of these speculative stocks do eventually emerge as heady winners. But know this is more about gambling than investing. You should look back at a company's history. If it has been trying to build a business for many years, then it's hard to see why this is the year for sales to finally grow.

-- David Sterman

David Sterman has worked as an investment analyst for nearly two decades. He started his career in equity research at Smith Barney, culminating in a position as Senior Analyst covering European banks. David has also served as Director of Research at Individual Investor and has made numerous media appearances over the years, primarily on CNBC and Bloomberg TV. David has a master's degree in management from Georgia Tech. Read More...

Disclosure: Neither David Sterman nor StreetAuthority, LLC hold positions in any securities mentioned in this article.

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