What’s the opposite of a value stock? A company with a large market value but a tiny or non-existent revenue base. These companies often hold a great deal of promise to their backers, but can also be a black hole for investors’ dollars if they need to keep raising money just to stay afloat.

On occasion, these highly speculative plays really pay off, as we saw with VirnetX Holdings (AMEX: VHC). I took a look at this owner of telecom patents in August — after its stock had tripled from $2 to $6. [Read the article here.]

Around that time, VirnetX told investors that revenue from its patents would finally start streaming in. These days, shares trade around $18, up some +900% from the 52-week low. Of course for every Virnet, there are numerous duds, so a basket approach to speculative stocks makes the most sense.

With that in mind, I ran a screen for stocks that are valued at more than $100 million, yet have trailing revenue of less than $1 million. That’s a different set of criteria — yielding a largely different list of stocks — than the last group of speculative stocks I reviewed. [Read: “The Most Speculative Stocks on the Market”]



Alternative Energy Holdings (Pink sheets: AEHI)
You have to scratch your head and wonder why this little start up is worth $200 million. The company is looking to build a nuclear power plant in Idaho, and recently secured an equity line of credit (which means new shares are issued on an as-needed basis) that is likely to take its market value even higher as more and more shares are in play). But the hurdles for nuclear power are massive, despite the fact that nuclear power appears to enjoy bipartisan support. Trouble is, the Obama administration and the GOP greatly differ on other energy policy initiatives, so nuclear power opportunities have become stuck in gridlock.

#-ad_banner-#If and when the nuclear power industry springs back to life here in the United States, the process of getting the right permits and then building a plant can take years. Moreover, the upfront costs of nuclear power plant construction are so high, and prices for natural gas — another “clean source of energy” — are so low, that the business case for nuclear doesn’t look very good right now. Lastly, how do you even place a value on a business like this?

Presumably, management has built spreadsheets projecting robust cash flow many years down the road. But those forecasts never seem to account for all of the stumbling blocks along the way.

Augme Technologies (Nasdaq: AUGT)
Some investors think that Augme could become the next explosive play on wireless telecom patents, as was the case with Virnet noted earlier. Augme’s shares surged from $1 in June to a recent $2.75 on hopes that the company would prevail in various lawsuits that might ultimately yield robust payouts.

But Augme isn’t just a patent play. The company sells a series of software developer tools that enhances the display and interactivity of mobile ads that are increasingly being deployed on smartphones. The company’s revenue appears to be starting to build toward the $1 million per quarter mark, which is admittedly tiny but at least a sign that customers are starting to sign up.

But caution is warranted. Augme’s balance sheet is quite weak, and the recent stock surge virtually guarantees an imminent capital raise. You’re likely better off researching this stock now, and should look to buy only when the company has raised enough money to carry it through the next 12 months. The fact that the company already has 58 million shares outstanding tells you that existing shareholders have already felt the pain of dilution, many times over.

Cadiz (Nasdaq: CDZI)
If current weather trends continue, parts of the U.S. Southwest may run out of water in a decade or two. As a solution, little-known Cadiz has bought up 45,000 acres of land in Southern California, not far from the Colorado River, that could potentially remain as an untapped resource. The company is securing agreements with local utilities to buy water supplies in the event that other aquifers run dry. Cadiz can also store imported water in its aquifers in case water utilities look to stockpile million of gallons of water.

Yet it’s not clear how this business model will come into play, until and unless a water crisis emerges. Management even said so in the last 10-K: “We do not know the terms, if any, upon which we may be able to proceed with our water and other development programs.” In the interim, the company would like to install solar power on its land and presumably secure rent or other revenue streams. And nearly 10,000 acres of its land is zoned for agricultural use.

So here’s the play. If you see the U.S. Southwest head into another deep drought, check out this stock. Until then, consider the water plays my colleague Tim Begany recently wrote about. [Read Tim’s excellent piece by clicking here .]

Single Touch (Nasdaq: SITO)
This company wins the 2010 award for the most inane press release headline: “Single Touch July Revenue Tops Third Quarter Earnings.” That’s a claim that can be made by virtually every company in the world.

All kidding aside, this provider of retail-focused instant messaging services has a pretty intriguing business model. Retail stores can send out alerts to smartphones in its vicinity that notifies consumers about in-store specials and reminders when products or services, such as photos, are available for pick-up. A wide number of retailers have signed up for the service, although the company hasn’t yet figured out how to translate that into meaningful sales growth.

Single Touch’s $100 million market value tells you that investors have high hopes for eventual strong sales and profit growth. You may want to check out the company’s upcoming fiscal fourth quarter (September) earnings release to see if such lofty hopes are justified.

Action to Take –> Of the companies mentioned here, only Augme and Single Touch look set to deliver impressively rising sales in the near-term. At this point, it’s tough to tell if they will be the type of true game-changers my colleague Andy Obermueller, editor of StreetAuthority’s Game-Changing Stocks, likes to talk about (these two stocks are still a bit speculative — Andy likes stocks that can deliver huge gains over a long time) — but they could still deliver big gains. The other stocks mentioned here are worth monitoring in anticipation of the day that their business models take off or their market values shrink to a more manageable level.

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