Top Five Small-Cap Stocks

Management feels that the company's fourth-quarter results continue to indicate that Natural Gas Services is a leader in the market. The company is encouraged by future opportunities and its ability to capitalize on them, and expects to add a record 300 to 350 compressors to its fleet in 2008. We feel that the company's strengths outweigh the fact that it generates somewhat weak operating cash flow, but it is important to recognize that the industry is cyclical, with fortunes directly tied to the general tenor of economic activity that in turn drives energy demand.

Our quantitative rating is based on a variety of historical fundamental and pricing data and represents our opinion of a stock's risk-adjusted performance relative to other stocks.

However, the rating does not incorporate all of the factors that can alter a stock's performance. For example, it doesn't always factor in recent corporate or industry events that could affect the stock price, nor does it include recent technology developments and competitive dynamics that may affect the company.

For those reasons, we believe that a rating alone cannot tell the whole story and that it should be part of an investor's overall research.