Two of the fastest-moving stocks in Barchart’s Top 100 Stocks to Buy in Monday trading were Kopin (KOPN) and Nephros (NEPH), up 60 and 52 positions, respectively, landing in the 40th and 48th positions.
I’ll be honest, I’ve never heard of either of these companies, but they’re fast-moving, and in this market, that’s about the only thing that counts right now.
New to the top 100, Kopin’s stock is up 62% in the past month and 163% in 2025, entering the list at a higher position than any of the other 14 new entrants. Of course, trading under $5, the penny stock is likely to capture the interest of retail investors seeking a quick profit.
I, on the other hand, want to buy and own stocks for the long haul; stocks whose businesses can grow for decades, not years.
As for Nephros, its shares hit a 52-week high of $5.59 yesterday, the stock’s highest level in three years. Over the past 36 months, its shares have appreciated by 377%, outperforming Kopin’s 253% return over the same period.
My task today is to determine if either stock has the right stuff to move into double digits and beyond over the next three to five years.
The Skinny on Kopin (KOPN)
The 41-year-old Massachusetts business specializes in microdisplay technologies and optical systems.
“These products are critical for applications ranging from weapon mounted thermal sights to spatial computing devices and medical headsets,” states its 2024 10-K.
“We have been supplying our microdisplays and ASOS to the U.S. Department of Defense for many years for soldier-centric systems, rotary and fixed wing aircraft and are developing products for armored vehicles and soldier-carried missile systems.”
In 2024, 82% of its $50.3 million in revenue came from defence industry customers. That was up from 56% in 2023 and 52% in 2022.
There is nothing wrong with focusing one’s entire business on defense customers. Huntington Ingalls Industries (HII) does, and its shares are up 53% year-to-date. It’s a dangerous world out there. Somebody has to make the products available to soldiers.
An obvious risk is the concentration of customers. The top two accounted for 76% of its 2024 revenue, with DRS Network & Imaging Systems, LLC, being the largest, at 65%.
The good news is that DRS is a subsidiary of Leonardo DRS (DRS), a company with a $12 billion market cap, which in turn is 71% owned by Leonardo S.p.A. (FINMY), an Italian defence conglomerate with a $37 billion market cap. Kopin doesn’t have to worry about getting paid.
One of the other risks of buying Kopin stock for the long haul is the consistency of revenue and earnings growth. It’s one thing to experience ebbs and flows over the years, but this company has never managed to move the top-line revenue above $115 million (in 2008 and 2009).
Over the past 15 years, its revenues have fluctuated between $64.7 million in 2011, on the high side, and a low of $22.6 million in 2016, according to S&P Global Market Intelligence.
Ultimately, it has generated an annual operating profit on only four occasions over the past 35 years. As a result, it has an accumulated deficit of $410 million. It would take decades to reverse this deficit.
The company has just completed a $41 million PIPE (Private Investment in Public Equity) to continue with its most recent growth plans. Based on 162.8 million shares outstanding in August, the PIPE diluted the shareholders by 12%.
The PIPE investors bought shares at $2.10 a share to protect their interests. It had little to do with Kopin being an excellent investment.
I wouldn’t buy KOPN stock for the long haul. However, the options volume is decent, so if you must, it might be a good idea to consider using call options to make your bet.
Nephros (NEPH) Growth Seems Real
The maker of water filtration products for the medical and commercial markets is significantly smaller than Kopin, with a market cap of just $61 million, placing it in micro-cap territory. That’s not necessarily a bad thing.
Founded in 1997 by medical professionals affiliated with Columbia University Medical Center and NewYork-Presbyterian Hospital in New York City, the company targets four markets: Hospitals and other healthcare facilities, Dialysis Centers, Commercial Facilities, and the Military and Outdoor Recreation.
In the first six months of 2025, its revenues totaled $9.3 million, representing a 37% increase from 2024. Its adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $1.02 million, much better than the $228,000 loss in the same period a year ago.
It has now generated three consecutive quarters of profitability. It finished the second quarter with trailing 12-month revenue of $16.7 million, 21% higher than the same period a year ago.
A key to its profitability is the increase in gross profit margins. In Q2 2025, the rate was 63%, 400 basis points higher than in Q2 2024.
From a balance sheet perspective, it ended the second quarter with $5.1 million in cash and no debt.
Nephros went public in September 2004 at $6.00 a share. Between its launch in April 1997 and its IPO, it generated just $300,000 in revenue, while spending more than $12.5 million in research and development.
As of June 30, 2004, it had an accumulated deficit of $30.9 million. As of June 30, 2025, the deficit had grown to $143.5 million.
The difference between Nephros and Kopin is that the former’s business actually appears to be turning a corner.
In 2015, the company reported revenue of $1.94 million and an operating loss of $3.25 million. In the trailing 12 months ended June 3o, it had revenue of $16.68 million, with an operating profit of $1.34 million.
Most importantly for Nephros shareholders, revenue grew in six of the past 10 years, with an 8% operating margin in the trailing 12 months.
I don’t think there’s any question that buy-and-hold investors are better off with Nephros rather than Kopin. It’s the better of the two top 100 stocks to buy.
