This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

5 Companies With Fastest-Growing Profits

Stocks in this article: CRRRRGBQCORROICLULU

BOSTON ( TheStreet Ratings) -- The U.S. economy, while making strides since the Great Recession, slowed in the first quarter, and the job market and housing industry have worsened. Higher oil and food prices, Europe's debt woes and the earthquake in Japan piled on to the misery.

Still, I wanted to find stocks that have been bucking the trend. Specifically, companies that are increasing profits at a fast rate. I screened top-rated stocks (as ranked by TheStreet Ratings' quantitative equity model) and looked for companies with growth in revenue, earnings and cash flow of at least 20% in the most recent quarter and with estimated growth of at least 20% in earnings per share over the next year.

I also wanted companies with so-called high-quality earnings, meaning cash flow is greater than net income. If net income is greater than cash flow, it could be a sign that the company is manipulating profits or using aggressive accounting methods to make earnings look better than they may be.

Here are the highest-rated stocks, according to the aforementioned metrics:

Carbo Ceramics (CRR) makes ceramic proppants, which are used in the hydraulic fracturing of natural gas and oil wells. Once a driller has "fractured" the sediment, it needs something to keep it "propped" for gases or liquids to flow more efficiently to the wellhead. Ceramic proppants offer an alternative to popular sand-based materials and have shown to greatly improve the production of oil and gas.

Carbo Ceramics has been a big benefactor of exploration in the Eagle Ford and the Haynesville shale territories, setting records for proppant-sales volume in the recent quarter, with earnings and operating cash flow up 44% and 55%, respectively. Management is aggressively building for the future, with two projects that should increase proppant capacity to over 2.1 billion pounds per year, an increase of 35% over current production.

Yet, after the stock has more than doubled in the past year, some investors are concerned Carbo Ceramics is overvalued. The stock trades at a premium to the industry (current price-to-earnings ratio of 36 and forward P/E of 23), but, given growth prospects and leadership position in a booming industry, I still think the stock offers a great secular growth opportunity. TheStreet Ratings has a "buy" with a $197 price target (34% potential upside) on shares of Carbo Ceramics.

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,810.06 +91.06 0.51%
S&P 500 2,063.50 +10.75 0.52%
NASDAQ 4,712.97 +11.1030 0.24%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs