Penny stocks have hugepotential -- that's their blessing and their curse.

For more than a year, we've been chronicling companies that appear to be on their deathbeds. As we note, not every company will give up the ghost. But since that original column, quite a few have either disappeared entirely or seen huge drops in their share prices: Fannie Mae, Merrill Lynch, Lehman Brothers, Bear Stearns, Washington Mutual, and XM Satellite Radio, to name just a few.

In late May, I decided it was time to take noteof Talisman Energy (NYSE: TLM). Unlike Venoco (NYSE: VQ) -- a West Coast oil playerthat promptly rocketed higher following my positive call -- Talisman's share price hasn't moved much since I took a shine to the Canadian E&P. The company's third-quarter report shows the business to be coming along just fine.

Many investors are increasingly convinced that the worst of the recession is behind us. Although optimism about future growthhas pushed share prices up fairly dramatically since earlier this year, it's taken awhile for that optimism to translate into higher expectations for company earnings.

When a stock's share price is lower than the mercury in a thermometer in North Dakota in February, investors tend to give it the cold shoulder. But as the market warms to a stock's prospects, its price can heat up in a hurry. Alas, you can rarely tell that a stock is melting investors' hearts until afterit has made that leap up.