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) 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) 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.