Top Five Fast-Growth Stocks

Each business day, TheStreet.com Ratings compiles a list of the top five stocks in five categories -- fast-growth, all-around value, large-cap, mid-cap and small-cap -- and publishes these lists in the Ratings section of our Web site.

This list is based on data from the close of the previous trading session. Today, fast-growth stocks are in the spotlight. These are stocks of companies that are projected to increase revenue and profit by at least 12% in the coming year and rank near the top all stocks rated by our proprietary quantitative model, which looks at over 60 factors.

In addition, the stocks must be followed by at least one financial analyst who posts estimates on the Institutional Brokers' Estimate System. Please note that definitions of revenue vary by industry, and this screen does not make adjustments for acquisitions, which can materially affect posted results. Likewise, earnings-per-share growth may be affected by accounting charges, share repurchases and other one-time items.

Note that no provision is made for off-balance-sheet assets such as unrealized appreciation/depreciation of investments, market value of real estate or contingent liabilities that might affect book value. This could be material for some companies with large underfunded pension plans.

Outrageously Fast Growth Stocks

Axsys Technologies (AXYS Quote) designs and manufactures precision optical solutions (such as thermal imaging cameras, stabilized camera systems, motion control systems and scanning systems) for use by the U.S. government and high-performance commercial markets in aerospace, defense and other applications. Axsys also distributes precision ball bearings used in a variety of industrial and commercial applications.

In the fourth quarter of 2007, the company recorded strong earnings. Demand for both Axsys' traditional business and the recently acquired gyro-stabilized gimbal segment helped generate revenue of $47.9 million, compared with $33.8 million in the fourth quarter of 2006. Sales increased 42% year over year to a record $47.9 million. The company reports that its backlog increased to a record $140 million, which is a 21% increase from the year-ago period. This increase was due to strong demand for infrared cameras and lenses, gimbal systems and military-grade motion control systems.

Looking to full-year 2008, management now expects to generate sales in the range of $208 million to $212 million, up from the previously forecast $193 million to $197 million. The company also forecasts earnings per share between $1.70 and $1.75, up from a previous view of $1.57 to $1.60. However, any significant reduction or delay in purchase of the company's products by the U.S. government could have an adverse effect on Axsys' financial performance, as the company derives a significant portion of its revenue from this source.

Atwood Oceanics (ATW Quote) 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 revenue growth, a solid financial position, earnings per share growth and solid stock performance. Revenue rose 49% in the fourth quarter of 2007 to $121.6 million, up from $81.8 million in the fourth quarter of 2006. Atwood's debt-to-equity ratio is very low at 0.03, implying successful management of debt levels. During the past fiscal year, the company increased its bottom line by earning $4.37 a share vs. $2.75 a share in the prior year. Atwood Oceanics 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.