5 Biggest, Best Companies Across World

Apple, Vale, Sina and two others rank as the most highly touted companies in their home countries.
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NEW YORK (TheStreet) -- U.S. stocks rose yesterday, snapping six days of losses, on signs the service sector is growing.

The Institute for Supply Management's gauge of service industries, which collectively account for the largest part of the U.S. economy, lifted stocks, leading to the highest close since May.

Still, unemployment remains widespread and is estimated by economists to average more than 9% through next year. The upcoming earnings-release season -- kicked off by


(AA) - Get Report

on Thursday -- is giving some investors pause as some are awaiting clearer signs the economy won't fall into a recession.

Corporate earnings are expected by analysts to accelerate in the current quarter from the three months through September. Analysts forecast that S&P 500 earnings increased 23% in the third quarter and will quicken to 31% in the fourth quarter.

Below are five stocks that are among the most highly rated in their respective industries and countries. They are based in the U.S., Brazil, Germany, China and India. If executives at those companies -- all of them bellwethers -- provide bullish outlooks, their share prices probably will follow.



(AAPL) - Get Report

: Apple, the maker of computer and electronic devices, is seeing sales jump due to the popularity of its iPad tablet and iPhone.

Analysts estimates call for revenue growth of 74% this year, to $63.4 billion, and 117% in 2011, to $79.2 billion. They expect earnings per share this year of $14.45, a 130% rise over 2009, and $17.62 in 2011, a 22% increase.

Apple's net operating margin of 20.7% is the highest among the 34 companies in the computer hardware maker sector.

Shares are up 34% so far this year, and hit a 52-week high last week, versus its peer group's 1.7%.

Conservatively managed, Apple has no long-term debt and held $24.3 billion in cash at the end of the second quarter, or $26.59 per share.

Apple's price-to-earnings ratio is 21.6, versus 34.2 for its peer group, suggesting the shares are selling at a discount.

Of analysts covering Apple, 47, or 94%, advise purchasing its shares and three advise holding them. None rate the stock "sell." A median price target of $342.81 suggests a return of 19% in the next 12 months. JPMorgan offers a price target of $400, implying 38% of upside.



(VALE) - Get Report

: Vale, the world's largest producer of iron ore and second-biggest maker of nickel, is a top supplier to the volatile steel industry. Its biggest customer is China.

Last year, steel production declined sharply and sales fell 39% while earnings plummeted to 99 cents per share, from $2.58 in 2008.

But this year analysts are projecting a rebound, including a 63% increase in sales, to $39.8 billion, and earnings of $2.55 per share.

Vale's cash flow grew at a compound annual growth rate of 35% from 2002 through 2009, and that pace is continuing this year.

Shares have risen 9.7% so far this year, twice that of the mining industry peer group. Its price-to-earnings ratio is 17 versus its peers' 25.9, which suggests that shares are selling at a discount.

Analysts' mean share price target over the next 12 months is $39, a 35% premium to its current price, but that will likely change because Vale announced a $2 billion share buyback program last week.

Of analysts covering Vale, 21, or 84%, recommend buying its shares and four counsel holding them. None rate Vale "sell."



(SAP) - Get Report

: SAP dominates the global market for enterprise-application software used for accounting, customer-relationship management and supply-chain management.

Shares are up 8.6% this year, versus the 12% gain by its applications-software peers.

Its price-to-earnings ratio is 21.5, versus its peers' average of 31, suggesting it is selling at a discount.

SAP has a three-year annual sales growth rate of 9.1%, while net income has grown 2.9% annually over the same period.

Performance is expected to improve slightly better than that seen by the economy. Analysts forecast a 15% rise in sales in 2010, to $17 billion, a turnaround from the 8% decline of 2009. They forecast 2010 earnings per share of $2.86 versus $2.13 in 2009, and an increase of 12%, to $3.19, in 2011.

SAP has a $59.4 billion market value, and institutional investors own 5% of the stock.

Of analysts covering SAP, seven, or 35%, rate its stock "buy," 10 rate it "hold" and three rank it "sell." A median price target of $49.72 suggests a return of 2.5% in the next 12 months. Goldman Sachs is more bullish, predicting a gain of 12% to $54.50.



(SINA) - Get Report

: Sina is benefiting from the Internet-commerce explosion in China, where it is a leading online media services provider. It gets about 70% of its revenue from advertising.

Revenue growth has averaged 19% a year over the past three years, while earnings per share grew at an average annual rate of 116% in the same period, including a 423% gain in the past 12 months.

Analysts expect revenue to grow 8.5% in 2010 to $389 million, and to rise 32% in 2011. They estimate 2010 earnings per share of $1.64, and growth of 22.5% in 2011, to $2.01 per share.

Shares have risen 12% this year, and are up 39% over the past year, versus a decline of 5.1% for its industry peers so far this year.

Sina, with a market value of $3.1 billion, has no long-term debt, and institutional investors own 93% of its shares.

Of analysts covering Sina, 20, or 80%, advocate purchasing its shares and five recommend holding them. None suggest selling the stock. A median price target of $52.35 implies 3% of upside in the next year. RBS forecasts an advance of 10% to $56.


Cognizant Technology Solutions

(CTSH) - Get Report

is a provider of information-technology consulting and outsourcing services.

Average annual revenue growth over the past three years is 32%, while annual earnings per share growth averaged 32%.

Analysts estimate 2010 revenue will be $4.5 billion, up 36% year-over-year, rising to $5.5 billion in 2011, a 22% increase. Their mean earnings per share outlook for 2010 is $2.28, up 25% from 2009, and they expect $2.61 per share in 2011, a 14% increase.

Shares are up 44% so far this year, reaching a 52-week high of $67.06 on Friday, versus the 2.5% gain for its industry peer group on the year.

Cognizant began 2010 with $1.42 billion in cash and has no long-term debt.

The company has a market capitalization of $19.3 billion and is a favorite of institutional investors, who own 95% of its shares.

Of analysts covering Cognizant, 22, or 85%, rate its stock "buy" and four rate it "hold." None rank the stock "sell." A median price target of $67.92 suggests a return of 8% in the next 12 months. Citigroup predicts that Cognizant's shares will rise 17% to $74.

>To see these stocks in action, visit the

5 Biggest, Best Companies portfolio

on Stockpickr.


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