Top Five Mid-Cap Stocks: Ametek

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.

Ametek AME manufactures electronic instruments and electromechanical devices. The company has operations throughout the U.S. and in more than 30 other countries. Its electronic instruments segment manufactures advanced monitoring, testing, calibrating and display instruments for the aerospace, power and industrial markets worldwide. The electromechanical segment produces highly engineered electromechanical connectors for hermetic (moisture-proof) applications; specialty metals for niche markets; and brushless air-moving motors, blowers and heat exchangers. The products are used in floor care and other specialty applications.

Ametek has been rated a buy since November 2002. Strengths include its consistent revenue, earnings per share and net income growth, as well as a solid stock performance. In addition, Ametek's minimal exposure to the housing and automobile markets could insulate it from the sluggish U.S. economy.

For the first quarter of 2008, the company reported a 30% year-over-year increase in earnings, led by operational improvements and revenue growth of 21%. The company improved EPS to 62 cents in the most recent quarter from 48 cents in the first quarter of 2007, continuing a two-year pattern of earnings improvement. Net income grew to $66.4 million from $50.9 million a year ago. Operating cash flow increased 39% to $77 million. Additionally, the company paid a quarterly dividend of 6 cents a share on March 31.