Top Five Fast-Growth Stocks

Diamond Offshore Drilling (DO Quote - Cramer on DO - Stock Picks) engages in the contract drilling of oil and gas wells. The company's fleet of 30 submersibles enables it to offer a range of services in various markets worldwide, including the deep water, harsh environment, and conventional semisubmersible markets. Diamond also owns 13 jack-up rigs, which are mobile, self-elevating drilling platforms equipped with legs that are lowered to the ocean floor until a foundation can be built to support the platform. Finally, Diamond also has one drillship, the Ocean Clipper, located off the coast of Brazil.

We have rated Diamond a buy since June 2005. This rating is supported by good top-line performance and superior shareholder returns. Diamond has reported strong revenue growth due to strong demand for rigs across all geographic regions. Revenue increased 15% year over year in the fourth quarter of 2007 to $666.7 million. Over the past three years, Diamond has shown a significant improvement in return on equity due to strong earnings growth. The company reported ROE of 29% as of the end of the fourth quarter. Furthermore, the company has a track record of paying regular cash dividends, as well as a recent special dividend of $1.25 per share.

Diamond is expected to post strong growth in the future, benefitting from new drilling contracts. Recently, the company entered into one new contract and extended three existing deepwater drilling contracts with Petrobras (PBR Quote - Cramer on PBR - Stock Picks), Brazil's state-owned drilling company. In addition, the company received a two-well contract from Callon Petroleum on Nov. 29 for its rig, Ocean Victory. Bear in mind, however, that the slowdown in the U.S. economy and weak job data may put pressure on demand for oil and gas. This could in turn disturb activities related to exploration and production, affecting the number of rigs that are operational in the market and the profitability of the company.

Atwood Oceanics (ATW Quote - Cramer on ATW - Stock Picks) is a Houston-based international drilling contractor, engaging in the offshore drilling and completion of exploratory and developmental oil and gas wells worldwide. The company also provides related support, management, and consulting services.

We have rated this company a buy since September 2004, based on its revenue growth, solid financial position, EPS growth and solid stock performance. Revenue rose 49% year over year for the fourth quarter of 2007 to $121.6 million. Atwood's debt-to-equity ratio is very low at 0.03, implying that the company has been very successful at managing debt levels. During the past fiscal year, the company increased its bottom line by earning EPS of $4.37, vs. $2.75 in the prior year. The company has demonstrated a pattern of positive EPS growth over the past two years. Finally, the stock has surged 72% over the past year, powered by its strong earnings growth of 128%.

Regarding the stock's future course, although almost any stock can fall in a broad market decline, Atwood should continue to move higher despite the fact that it has already seen a substantial gain in the past year. Risks to the rating include any pricing fluctuations in the oil and gas industry, the company's ability to secure adequate financing, and governmental regulation and environmental matters.

Amedisys (AMED Quote - Cramer on AMED - Stock Picks) provides home health and hospice services in the southern and southeastern United States. The company provides a wide variety of health care services, including skilled monitoring by registered nurses, occupational and physical therapy, assessments, and patient education.

Based primarily on a robust top-line performance and expansions to both margins and the bottom line, we have rated Amedisys a buy since January 2005. Amedisys also has a strong liquidity level and low leverage. For the fourth quarter of 2007, the company's net income grew 47% year over year, driven by strong growth in revenue. Net income stood at $$16.7 million, or 63 cents a share, vs. $11.4 million, or 48 cents a share, a year ago.

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