Top Five Mid-Cap Stocks for Oct. 9

II-VI(IIVI Quote) develops, manufactures and markets high-technology materials and derivative products for precision use in industrial, medical, military, security and aerospace applications. Our rating for II-VI has been in place since October 2006. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, reasonable valuation levels and solid stock price performance.

For the fourth quarter of fiscal 2008, the company reported revenue growth of 31.4% year over year. This growth helped boost EPS from 37 cents in the fourth quarter of fiscal 2007 to 50 cents in the most recent quarter. II-VI has a low debt-to-equity ratio of 0.01, indicating very successful management of debt levels. Along with this, the company demonstrates the ability to cover its short-term cash needs, as shown by its quick ratio of 2.77.

Powered by its strong earnings growth of 35.13% and other important driving factors, this stock has surged by 26.09% over the past year. We feel that the company's strengths outweigh the fact that it shows weak operating cash flow.

Our quantitative rating is based on a variety of historical fundamental and pricing data and represents our opinion of a stock's risk-adjusted performance relative to other stocks.

However, the rating does not incorporate all of the factors that can alter a stock's performance. For example, it doesn't always factor in recent corporate or industry events that could affect the stock price, nor does it include recent technology developments and competitive dynamics that may affect the company.

For those reasons, we believe a rating alone cannot tell the whole story and should be part of an investor's overall research.