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Exponent has been rated a buy since November 2001. An impressive record of EPS growth and compelling growth in net income are several of the company's strengths. For the first quarter of fiscal 2008, revenue rose by 15% year over year. Net income for the same period increased 26% to $6.4 million. Exponent reported that EPS improved 29% to 40 cents in the most recent quarter. In fact, the company has demonstrated a pattern of positive EPS growth over the past two years. Finally, return on equity improved slightly from the year-ago quarter.

Driven by strong earnings growth and other factors, this stock has surged 58% over the past year. We feel that Exponent should continue to climb despite its impressive performance. The company believes that it remains well positioned to capture new opportunities for growth as it moves further into fiscal 2008. For the full year, management expects to report high single-digit to low double-digit growth in revenue as a result of plans to pursue strategic opportunities. However, Exponent's future results could be negatively impacted by any disruptive changes in both general and industry-specific economic conditions and the effects of tort reform and government regulation of the company's business.

Exactech EXAC develops, makes, markets, distributes and sells orthopedic implant devices, related surgical instrumentation, and biologic materials to hospitals and physicians in the U.S. and 27 other countries. It produces knee systems and other joint replacement implants. Exactech's revenues are derived primarily from sales of these implants; however, revenues from the worldwide distribution of biologic materials have increased as a percentage of total revenue.