Top Five Mid-Cap Stocks: March 27

Circor CIR has been manufacturing an array of valves since the early 1900s. Valves range in application from generic products for heating and cooling to more specialized steam catapult valves on nuclear-powered aircraft carriers and cryogenic valves used in space shuttles.

The company also designs, makes and distributes a variety of related products, such as fittings, actuators, condensate pumps, flow meters and water heaters. It provides a range of services to assist customers in the installation and maintenance of fluid-control systems. Circor operates 16 manufacturing facilities in the U.S., Canada, Western Europe and China, and services more than 12,000 customers in over 119 countries.

Circor has been rated a buy since November 2004. The company's strength can be seen in its good cash flow from operations, encouraging stock performance and solid financial position. Net operating cash flow increased 118% year over year to $36.5 million in the fourth quarter of 2007. The company's debt-to-equity ratio is very low at 0.05, implying successful management of debt levels. Shares have jumped 29% in the past year. While the stock price has been driven to a level that is somewhat expensive compared to industry peers, we feel the higher price is justified.

We feel that the company's strengths outweigh a year-over-year decline in net income to $10.12 million from $10.38 million. Circor did record revenue growth of 2.9% for the fourth quarter, but this does not appear to have trickled down to the company's bottom line, as evidenced by a decline in earnings per share. The company has reported somewhat volatile earnings recently. However, we feel that Circor is poised for EPS growth in the coming year.

Ameron AMN manufactures highly engineered products and materials for the chemical, industrial, energy, transportation and infrastructure markets worldwide. Products include high-performance coatings and surfacer systems for the preservation of structures, molded fiberglass pipe and fittings and ready-mix concrete. The company has plants in Arkansas, California, Oklahoma, Texas and Washington -- and through subsidiaries in Australia, Colombia, Malaysia, the Netherlands, New Zealand, Saudi Arabia and Singapore.

Ameron has been rated a buy since June 2005. On March 26, the company reported solid results for the first quarter of 2008. Net income was reported as $9.7 million, representing a 15% increase year over year. Earnings per share increased 14%, and sales totaled $149.8 million in the first quarter, which represented an increase of 24%. The earnings improvement was driven by continued growth of the Fiberglass-Composite Pipe Group and the ready-mix concrete and aggregates business in Hawaii.

The company's chairman and CEO announced that the results for the first quarter represent a positive start for fiscal year 2008. The quarterly earnings results were in line with the company's expectations. Management continues to expect solid operating results in 2008, and despite uncertainty regarding the direction of the economy, the company is optimistic about its prospects for growth. Bear in mind, however, that the building products industry's performance is cyclical, depending on the overall health of the U.S. economy. The state of the housing and auto markets in particular could impact this industry and, therefore, this stock.