For the first three quarters of 2011, Twin Disc has seen net income more than double. Earnings grew by 45.6% this last quarter. The gross margin is up 35.9% and the overall growth rate is 39%. It pays a small dividend of just under 1%.

While Twin Disc's marine transmission business is diverse, the company has seen revenues rise as a result of higher oil prices, which have boosted orders for products used in offshore drilling craft. There is risk that if oil prices fall sharply in 2012, orders from this segment will be affected. But oil prices could remain high if the Fed continues to intervene to prop up the financial markets. Twin Disc is also benefiting from growing demand in the airport rescue and firefighting markets.

What I look for in a stock is a company with solid earnings, selling at a bargain, with an established technical pattern of higher highs and higher lows over the previous few years. TWIN got as low as $23 last October but then shot up to $47 when investors spotted this value. Look to buy in the $25 to $30 range, with an upside target of $56.

See all 50+ stocks in our Top Picks Report 2012.

Steven Halpern's TheStockAdvisors.com​​​​ offers a free daily review of the favorite stock ideas of the nation's top financial newsletter advisors.