Teva, Strayer, Pegasystems: Top 5 Stocks

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BOSTON (TheStreet) -- These companies are projected to increase revenue and profit by at least 12% in the coming year and have earned "buy" ratings from our proprietary quantitative model, which considers more than 60 factors. They are ordered by their potential to appreciate.

Strayer Education(STRA Quote) is a post-secondary education company that offers courses in accounting, business and information technology.

The numbers: Second-quarter net income climbed 29% to $28 million, or $2 a share, as revenue increased 29% to $126 million. The operating margin climbed from 34% to 36% and the net margin remained steady at 22%. Strayer has no debt. A quick ratio of 1.6 indicates ample liquidity.

The stock: Strayer is up 1% this year, underperforming the Dow Jones Industrial Average and the S&P 500 Index. The stock trades at an expensive price-to-earnings ratio of 33 and offers a dividend yield less than 1%.

Pegasystems(PEGA Quote) sells software that helps companies collect payments, manage claims and investigate potential fraud.

The numbers: Second-quarter net income almost quadrupled to $11.2 million, or 30 cents, as revenue rose 25% to $64 million. The operating margin expanded from 5% to 18% and the net margin increased from 6% to 18%. Pegasystems has an outstanding liquidity position, evident in its quick ratio of 3.9, and has no debt.

The stock: Pegasystems shares have more than doubled this year, trouncing major U.S. indices. The stock trades at an exorbitant price-to-earnings ratio of 48 and offers a dividend yield less than 1%. By comparison, companies in the S&P 500 pay an average dividend yield of 3.6%. Pegasystems' software helps companies cut costs by automating processes, making it an appealing stock in a recession.