Top 5 All-Around-Value Stocks for Dec. 31

The DIRECTV Group (DTV Quote) provides digital television entertainment in the United States and Latin America. The company's affiliated companies and subsidiaries in the U.S., Brazil, Mexico, and other Latin American countries acquire, promote, sell, and/or distribute digital entertainment programming via satellite to residential and commercial customers. The company serves more than 17.1 million customers in the United States and more than 5.3 million customers in Latin America.

We have rated the DIRECTV Group a buy since May 2006. Our recommendation is based on such strengths as the company's continuing revenue growth, higher return on equity, and increase in net income. DirecTV Group Inc.'s revenue increased 15.1% year-over-year in the third quarter of fiscal 2008, led by solid subscriber growth and a 6.1% increase in average revenue per user. Net income rose 13.8% when compared to the same quarter last year, rising from $319.00 million to $363.00 million, while EPS improved 22.2% from $0.27 to $0.33 during the same time period. DIRECTV Group's return on equity increased slightly over the past year and can be construed as a modest strength for the organization. The company's gross profit margin of 49.70% is considered to be strong. Along with this, the net profit margin of 7.30% is above the industry average.

In addition, the company reported that its free cash flow quadrupled to $332.00 million.

The company announced that it continued to see strong consumer demand for its services and content despite the challenging economic climate. In addition, its third quarter results were consistent with the company's long-term goals at this time. Bear in mind that any decline in finding new subscribers and rise in operating costs may restrict DTV's future financial performance. However, we do not see any significant weaknesses that are likely to detract from the company's overall positive outlook at this time.

Burlington Northern Santa Fe (BNI Quote) operates one of the largest railroad networks in North America, ranging across 28 states and two Canadian provinces. The railway is among the world's top transporters of intermodal traffic, moves more grain than any other American railroad, and hauls enough low-sulphur coal to generate about 10% of the electricity in the United States, according to the company.

We have rated BNSF a buy since July 2004. This rating is supported by the company's growth in revenue and net income. For the third quarter of fiscal 2008, the company reported that its net income surged 31.1% year-over-year, largely due to a revenue increase of 20.6%. Revenue growth was boosted by strong performances from all of the company's business segments, such as the Agricultural Products segment's 33.3% growth in the third quarter when compared to the same quarter last year. This revenue growth appears to have helped boost BNSF's earnings per share (EPS), which improved 35.1%. Management reported that these results were the best quarterly EPS results in the company's history. Net operating cash flow increased significantly by 79.75%, while return on equity increased slightly from 16.83% in the third quarter of fiscal 2007 to 17.38% in the most recent quarter. In addition, the company's operating income increased 21%.

Management stated that it remains optimistic for the future of the company, despite the significant challenges created by the U.S. and global economies. The company is confident that its long-term financial prospects are good. Bear in mind, however, that the Road and Rail industry is particularly sensitive to the overall health of the economy.

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 impact 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.