Top Five Fast-Growth Stocks

Oilfield services company Schlumberger(SLB Quote) has been a rated buy since July 2005. It saw double-digit revenue growth across its segments in the second quarter compared with the same period last year, and its operating margin for the quarter hit 28.16%, driven by increased exploration and drilling activity. Schlumberger also completed the acquisitions of Geosystem and Tyumenpromgeofizika, a supplier of land and marine electromagnetic and seismic imaging services, and a geophysical and wireline logging services provider in Western Siberia, respectively.

Schlumberger also shows a strong net income growth and improved return on equity, a clear sign of strength within the company. The stock is not without its risk. In the short term, management has cautioned of uncertainty in its North American market due to a rapid rise in gas storage levels and expected declines in commodity prices. These factors could hurt the company's performance over the long run.

Air Products and Chemicals(APD Quote), a chemical and gas producer, has been rated buy since August 2005, on the basis of the company's strong revenue growth, increasing net income, expanding operating margin and improved return on equity. In July, Air Products and Chemicals said that third-quarter sales surged 15.6% to $2.6 billion compared with the same period last year.

Earnings climbed 35.5% to $284.9 million, or $1.28 a share, in the quarter, sparked by higher sales volume and expanding operating margins. Return on equity for the quarter improved 136 basis points to 16.61%, primarily because of the increase in net earnings. Risks to the buy rating include challenges associated with integrating acquisitions and an unfavorable effect of currency fluctuation.