STOCK PICKS: Top 5 Small-Caps for July 4

We have rated Quaker Chemical a buy since May 2007 because of strengths such as robust revenue growth, an impressive record of earnings per share growth, and a largely solid financial position. For the first quarter of fiscal 2008, the company reported record quarterly sales and revenue growth of 18.3% year-over-year. Earnings per share improved 42.9% compared to the same quarter a year ago, rising from to 50 cents a share. Quaker's current debt-to-equity ratio is somewhat low at 0.67, although it is high compared to the industry average. Despite rising material costs, Quaker had a 6% improvement in operating income as a percentage of sales for the first quarter.

Management stated that it remains confident about the company's long-term future and the potential for improved earnings in fiscal 2008. Bear in mind, however, that overall customer demand for products greatly impacts Quaker's financial performance, so any downturn in its customers' businesses could negatively impact results, as could any unexpected shutdown in customer production. Increases in the costs of raw materials and overall economic and market conditions worldwide could also affect Quaker's future performance.

Integral Systems(ISYS Quote) builds satellite ground systems and equipment for command and control, integration and testing, data processing, and simulation. Founded in 1982, the company supports satellite missions for communications, science, meteorological and resource applications. Most of Integral Systems' sales involve a combination of commercial-off-the-shelf software and hardware products together with development services.

Integral Systems has been rated a buy since March 2005. This rating is supported by the company's growth in revenue and net income, largely solid financial position, and impressive record of earnings per share growth. For the second quarter of fiscal 2008, the company's revenues leaped 54.6% year-over-year, which in turn helped boost its EPS from 19 cents in the second quarter of fiscal 2007 to 44 cents in the most recent quarter. Net income increased 85.5% when compared to the same quarter one year prior. The company experienced strong financial results and growth in all three of its operating segments. Additionally, Integral Systems has no debt to speak of, which we consider to be a relatively favorable sign, and appears to be able to cover short-term liquidity needs.