Top Five Fast-Growth Stocks

Precision Castparts(PCP Quote), which makes complex metal components and products for the aerospace and industrial gas turbine industries, has been rated buy since August 2005. The company has recently made acquisitions expanding its casting, forging and fastener product offerings, and these should fuel revenue growth. Precision's net income has also been increasing as a result of strong top-line growth combined with an improvement in operating margin and a lower interest expense.

Because Precision depends on the aerospace industry for its top-line growth, any slowdown in that industry could reduce demand for its products. Other possible concerns include fluctuations in the prices of basic materials and any unseen difficulty in integrating recent acquisitions.

Electronic instruments and electromechanical device manufacturer Ametek(AME Quote) has been rated a buy since July 2005. The company's acquisition strategy is expected to augment revenue growth, with nearly 30 acquisitions completed since 1999. In June, the company announced the acquisition of Hamilton Precision Metals, which will diversify its electromechanical segment. That same month, it announced the acquisition of two privately held aerospace businesses. In addition, the company has invested more than $300 million in new product initiatives over the last five years.

The company's second-quarter revenue was up 15.3% on the year to $519.47 million. Its net income increased by 24.8% to $58.01 million in the same time frame. The principal risks to the buy rating include possible difficulties integrating acquisitions, rising raw-material costs and any prolonged downturn in the aerospace and defense, heavy-vehicle and process instrumentation markets.

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