Each weekday, TheStreet.com Ratings compiles a list of the top five stocks in five categories -- fast-growth, all-around value, large-cap, mid-cap and small-cap -- and publishes these lists in the Ratings section of our Web site.
This list, updated daily, is based on data from the close of the previous trading session. Today, large-cap stocks are in the spotlight. These are stocks of companies with market capitalizations of over $10 billion that rank near the top of all stocks rated by our proprietary quantitative model, which looks at more than 60 factors. In addition, the stocks must be followed by at least one financial analyst who posts estimates on the Institutional Brokers' Estimate System. The stocks are ordered by their potential to appreciate.
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.
Leading the list today is
, which makes navigation, communications and information devices based on GPS technology. It has been rated a buy since September 2005. The company has shown outstanding revenue growth, notable return on equity, a two-year pattern of steady increases in EPS, and is carrying no debt.
These strengths outweigh the fact that Garmin is trading at a premium valuation according to TheStreet.com Ratings' review of its current price compared with factors such as earnings and book value.
mines, smelts and refines copper in southern Peru. It has had a buy rating since August 2005. The company has benefited from higher metal prices, which have translated into strong growth in revenue and net income. Net income growth has been further driven by expanded operating margins, lower net interest expenses and a decline in the effective tax rate. The positive trend in net income has contributed to exceptional return on equity.
Southern Copper also has a strong project pipeline, with plans to increase copper output by 100,000 tons by 2009. The principal risk to the buy rating emanates from any undue delay in the completion of Southern Copper's capacity expansion and new mine products. Copper supply also could be affected by production stoppages due to labor strikes and the availability of mining equipment, as well as transportation bottlenecks.
Oil field services company
has been rated a buy since July 2005. In the third quarter, net income rose 35.4% to $1.35 billion, or $1.09 a share, from $999.82 million, or 81 cents a share, in the same period last year. Net income growth was driven by improved business in international markets, particularly Latin America, Russia, China and Indonesia. Revenue increased 19.6% to $5.93 billion in the third quarter compared with the same period last year, aided by double-digit growth from its oil field services as well as its WesternGeco segment.
During the quarter ended Sept. 30, Schlumberger repurchased 3.1 million shares for a total of $293 million. It also acquired a minority interest in PetroMarker, a Norwegian-based developer of marine electromagnetic measurements and interpretation technology. The company intends the acquisition to complement the WesternGeco integration of seismic and electromagnetics services.
Looking ahead, the company anticipates some recovery from low activity levels in the Gulf of Mexico, and it expects that natural gas activity in both Canada and the U.S. is likely to stabilize as production remains relatively strong, and gas storage approaches the winter season at comfortable levels.
has been rated a buy since July 2005. Today's list was compiled prior to the release of Lockheed's third-quarter results after the close of trading Tuesdy. The company's earnings of $1.80 per share in the third quarter exceeded the expectations of $1.64 a share from analystssurveyed by Thomson Financial. Lockheed also raised its 2007 outlook by 5 cents, anticipating earnings between $6.70 and $6.85.
In the second quarter, the U.S. government awarded an initial $187 million foras part of a $1.10 billion contract for the production of 30 new Advanced Block 50 F-16 aircraft. In addition, Lockheed was awarded a $2.44 billion U.S. Navy contract to acquire parts and materials for 12 F-35 Joint Strike Fighter aircraft.
The company receives a significant proportion of its revenue from contracts with theU.S. government. As a result, any change in procurement rules and regulations or any cuts in U.S. defense spending could hurt the company's performance negatively.
is involved in every aspect of crude oil and natural gas from exploration to distribution and has earned a buy rating since August 2005. The company has shown steady top-line growth, with revenue climbing 8.3% to $7.27 billion year over year in the most recent quarter, primarily because of increased production volumes and crude oil prices.
U.S natural gas consumption is expected to grow 2.9%, while demand for crude oil is expected to grow at an average rate of 1.5% annually, largely because of the rising number of automobiles. The U.S. imports more than 60% of its energy requirements from other countries, and this could result in an increase in the transportation of crude oil and natural gas. This trend should benefit Hess. Any unexpected, sharp downturn in oil and gas prices may hurt earnings, however. Exploration disruptions could also harm results.