Top 5 Mid-Caps for Nov. 20

Management stated that DeVry's strong first quarter results were driven by a strategic plan to increase enrollment through improved marketing and recruiting. The acquisition of U.S. Education also helps this strategic plan by allowing DeVry to further diversify its educational offerings. The company is confident that it should be able to continue maximizing shareholder value and achieving long-term growth goals despite a tough economy due to its diversified portfolio. It is important to remember that a quick ratio of 0.7 indicates a potential problem in covering short-term cash needs. In addition, the company shows low profit margins. All the same, we feel that the strengths detailed above are enough to outweigh any potential weaknesses at this time.

Ralcorp Holdings(RAH Quote) is a Missouri-based company that manufactures, distributes and markets store-brand (private label) food products in the grocery, mass merchandise, drug and foodservice channels. Ralcorp has been rated a buy since February 2004.

The company reported on Nov. 12 that its fiscal 2008 diluted EPS increased approximately 5% over its fiscal 2007 result, excluding the impact of restructuring charges and the profit contribution and incremental interest expense from the recent acquisition of Post Foods. That acquisition added approximately 18 cents to the reported EPS for the fourth quarter and approximately 16 cents for the full year. According to Ralcorp, its fourth-quarter EPS increased 39% year-over-year, while its net sales increased 44%, primarily due to the above-mentioned acquisition.

The company stated that it faced serious challenges that could have negatively affected its financial results in fiscal 2008. These included cost increases in raw material, packaging, and freight. However, Ralcorp was able to increase its volumes in most businesses despite these price increases, contributing to the 5% increase in fiscal 2008 EPS. The company is confident that it will be able to grow its core businesses in fiscal 2009, despite the likelihood of facing similar challenges in the year ahead. Bear in mind, however, that any familiar to adequately transition Post Foods into Ralcorp operations could affect the company's future results, as there are significant costs related to the transition.