Top Five Mid-Caps: April 10

Updated from 07:10 a.m. EDT

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 we focus on mid-caps. These are stocks of companies that have market capitalizations of between $500 million and $10 billion that rank near the top of all stocks rated by our proprietary quantitative model, which looks at more than 60 factors.

The stocks must also be followed by at least one financial analyst who posts estimates on the Institutional Brokers' Estimate System. They are ordered by their potential to appreciate.

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.

Pharmaceutical Product Development (PPDI Quote) is a global contract research organization. The company provides drug discovery and developmental services, post-approval expertise, and compound partnering programs for clients and partners that include pharmaceutical, biotechnology, medical-device and government organizations.

We have rated this company a buy since May 2004. This rating reflects a respectable financial performance and strong fundamentals. Revenue rose 15% year over year for the fourth quarter of 2007. The company has a gross profit margin of 45%, which we consider strong. In addition, the net profit margin is 11%. Pharmaceutical Product Development became debt-free during the third quarter of 2007, while it carried total debt of $56.7 million one year prior. Furthermore, the company increased its bottom line by earning $1.37 a share for the fourth quarter of 2007, compared with $1.32 one year prior. Finally, Pharmaceutical Product Development recently increased its annual cash dividend to 40 cents a share, payable quarterly at a rate of 10 cents, vs. a previous annual rate of 12 cents a share.

We feel that the company's strengths outweigh recent subpar growth in net income. Also, increasing cancellation rates and growing operating expenses remain major concerns. Further, the emergence of small sized companies offering niche services has led to increased competitive pressure that could affect the firm's prospects.

Tupperware (TUP Quote) makes and markets consumer products for the home, as well as cosmetics and personal-care products. The company operates in the U.S. and almost 100 foreign countries. Its core product line includes food storage containers and an established line of children's educational toys, serving products, microwave products and gifts. In 2000, the company acquired BeautiControl, which makes and sells skin care products, cosmetics and related products. Tupperware products are primarily distributed through the direct selling method. Distributors are granted the right to market Tupperware products using parties and other non-traditional retail methods and to utilize the Tupperware trademark. BeautiControl's products are sold through consultants and directors who are independent contractors.

Our buy rating for Tupperware has not changed since July 2004. The company's strengths can be seen in a variety of areas, such as its solid stock performance, revenue growth and improvement in net income. During the fourth quarter of 2007, revenue rose 19% year over year, and this growth appears to have helped boost earnings per share, which climbed 35% in the same period. Net income increased 38%, rising to $54.9 million from $39.9 million a year ago. Tupperware saw strong sales growth across all five of its business segments in the fourth quarter. Powered by its strong earnings growth, this stock has surged 53% over the past year. Finally, net operating cash flow increased to $127.2 million, or 10%, year over year.