STOCK PICKS: Top 5 Fast-Growth for Oct. 20

ManTech, FTI Consulting, Amdisys, Neogen and Bio-Rad make the list.
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Each business day, Ratings compiles a list of the top five stocks in one of five categories -- fast-growth, all-around value, large-cap, mid-cap and small-cap -- based on data from the close of the previous trading session. Today, fast-growth stocks are in the spotlight.

These are stocks of companies that are projected to increase revenue and profit by at least 12% in the coming year and rank near the top all stocks rated by our proprietary quantitative model, which looks at over 60 factors. In addition, the stocks must be followed by at least one financial analyst who posts estimates on the Institutional Brokers' Estimate System. Please note that definitions of revenue vary by industry, and this screen does not make adjustments for acquisitions, which can materially affect posted results. Likewise, earnings-per-share growth may be affected by accounting charges, share repurchases and other one-time items.

Note that no provision is made for off-balance-sheet assets such as unrealized appreciation/depreciation of investments, market value of real estate or contingent liabilities that might affect book value. This could be material for some companies with large underfunded pension plans.

ManTech International

(MANT) - Get Report

provides technologies and solutions for mission-critical national security programs for the intelligence community, the space community, and various departments and agencies of the U.S. federal government. ManTech has been rated a buy since March 2005. Our rating is based on strengths such as the company's robust revenue growth, largely solid financial position, and record of EPS growth.

For the second quarter of fiscal 2008, revenue rose by 33.3% year over year. This increase was primarily the result of a business strategy focused on high-end defense and intelligence markets supporting U.S. national security. Revenue growth appears to have helped boost earnings per share, which improved 40.9% when compared to the same quarter a year ago. The EPS increase from 44 cents to 62 cents represents the continuation of a pattern of positive EPS growth demonstrated by ManTech over the past two years, a trend which we feel should continue. Net income also increased in the second quarter, rising 45.0% from $15.10 million in the second quarter of fiscal 2007 to $21.90 million in the most recent quarter. ManTech's low debt-to-equity ratio of 0.16 and quick ratio of 1.30 illustrate the company's successful management of debt levels and avoid short-term cash problems.

Management announced that it is focused on gaining additional new business opportunities, such as a recent U.S. Navy award, for the remainder of fiscal 2008, along with continuing to strive for organic growth in fiscal 2009. For the third quarter of fiscal 2008, the company announced revenue guidance of 23% to 27%, while full-year fiscal 2008 guidance anticipates 27% to 30% growth in revenue. While the company shows low profit margins, we feel that its strengths outweigh any weaknesses. In addition, we believe that ManTech's stock should continue to move higher, despite having already enjoyed a very nice gain of 53.20% over the past year.

FTI Consulting

(FCN) - Get Report

provides consulting services to organizations confronting legal, financial and reputational issues. FTI Consulting has been rated a buy since May 2004. Our recommendation is based on the company's strong revenue growth, expanding operating margin, and increasing bottom-line. The company's solid cash position and notable returns also strengthen its position.

For the second quarter of fiscal 2008, FTI reported that its revenue grew 40.9% year over year, driven by strong segmental performance. Earnings per share also improved, rising from 53 cents in the second quarter of fiscal 2007 to 66 cents in the most recent quarter. The company's cash position improved during the quarter, as reflected by a $30.26 million surge in cash and cash equivalents. Return on assets and return on equity also expanded, improving 220 and 185 basis points, respectively. Operating margin improved 169 basis points when compared to the same quarter a year ago, rising to 19.92%. In addition, the company recently completed the acquisition of Attenex Corporation and Kinesis Marketing.

Looking forward, the company reaffirmed its full fiscal year EPS guidance for a range of $2.50 to $2.63 per share on revenue of $1.30 billion to $1.38 billion. However, the company's deteriorating gross profit margin, failure to retain and hire qualified professionals, and lower merger and acquisition activities are potential risks to consider. These challenges, along with the unfavorable change in economic conditions, could restrict future profitability.


(AMED) - Get Report

provides home health and hospice services in the southern and southeastern U.S. We have rated Amedisys a buy since January 2005.

On July 29, the company reported record financial results for the second quarter of fiscal 2008. Net earnings for the quarter surged 35.6% year over year due to coverage expansion from the buyout of TLC Healthcare Services. Net income increased to $20.38 million from $14.92 million in the second quarter of fiscal 2007. Diluted earnings per share rose 43.9% year over year to 82 cents per share. Helped by acquisition revenue, an increase in re-certifications, growth in average revenue per episode, and a rise in admissions, the company's net services revenue climbed 84.5% to $312.67 million. Additionally, the number of home health agencies increased to 454 from 296, while hospice agencies rose to 44 from 17 in the prior year's quarter. During the second quarter, Amedisys acquired five home health locations from Health Management Associates, which should add around $4.00 million to its annualized revenue.

Management announced that it was pleased with its second quarter results and the progress of the post-acquisition integration of TLC. Looking ahead to full year 2008, Amedisys included the anticipated impact of recent acquisitions in raising its net service revenue guidance to a range of $1.10 billion to $1.15 billion. The company also raised its EPS guidance to a range of $3.00 to $3.10 per share from the previous guidance of $2.70 to $2.80 per share. Bear in mind, however, that the company's revenue and earnings could be affected by any adverse changes in Medicare rates and reimbursement methodologies or any challenges related to the integrations of recent acquisitions.


(NEOG) - Get Report

and its subsidiaries develop, manufacture, and market products dedicated to food and animal safety. Our buy rating for Neogen has not changed since February 2003. This rating is based on strengths like the company's robust revenue growth, impressive record of earnings per share growth, and expanding margins.

For the first quarter of fiscal 2009, the company reported that its revenues, net income and EPS all represented quarterly records. Revenue growth was reported at 25.7% year over year, with revenues appearing to help boost EPS, which improved 17.2%. Net income also increased, rising 24.0% from $3.01 million in the first quarter of fiscal 2008 to $3.73 million in the most recent quarter. Neogen attributed its record results to the assimilation of recent acquisitions and significant growth in the company's primary product lines. Additionally, the company's gross profit margin is rather high at 54.70%, but Neogen has managed to decrease this number over the last year.

Neogen's sale price has not changed very much compared to where it was trading a year ago due to the relatively weak overall performance of the market and the company's recent mixed results. However, it is currently trading at a price that is somewhat expensive compared to the rest of its industry. Due to the strengths detailed here and a lack of significant weaknesses, we feel that higher price level is justified at this time.

Bio-Rad Laboratories

(BIO) - Get Report

manufactures and supplies a range of products and systems used to separate complex chemical and biological materials and to identify, analyze and purify their components. We have rated Bio-Rad a buy since November 2001 due to such strengths as its robust revenue growth, attractive valuation levels, compelling growth in net income and good cash flow from operations.

For the second quarter of fiscal 2008, Bio-Rad reported revenue growth of 33.4% year over year, primarily due to organic growth across key product areas and the addition of DiaMed Holding AG products to Bio-Rad's product portfolio. This growth seems to have helped boost earnings per share, which improved from 95 cents in the second quarter of fiscal 2007 to $1.58 in the most recent quarter. Net income also increased significantly in the second quarter, climbing 69.0% when compared with the same quarter last year. Net operating cash flow increased to $69.09 million.

Management announced that it was pleased with Bio-Rad's second quarter results and would continue to work on the integration of DiaMed throughout the remainder of the fiscal year. While the company has had a somewhat disappointing return on equity, we feel that the strengths detailed above outweigh any potential weaknesses.

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 affect the stock price, nor does it include recent technology developments and competitive dynamics that may affect the company.For those reasons, we believe that a rating alone cannot tell the whole story and that it should be part of an investor's overall research.

This article was written by a staff member of Ratings.