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 of 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.

Flowserve FLS engages in the development, manufacture and sale of precision-engineered flow equipments through three divisions: Flowserve Pump, Flow Control and Flow Solutions. The company operates worldwide, with 43% of its revenue coming from North America.

We have rated Flowserve a buy since January 2007. This is based on a convergence of positive investment measures, such as robust revenue growth, good cash flow from operations and expanding profit margins. Flowserve's revenue rose 19.3% year over year in the third quarter of 2007. The company also reported earnings per share of $1.10, compared to 49 cents in the third quarter of 2006. Furthermore, net operating cash flow has significantly increased by 1,548% to $106.77 million when compared to the same quarter last year, and the company has a gross profit margin of 35.9%, which we consider strong.