Each week, 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, last updated Nov. 9, 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.
The stocks must also be followed by at least one financial analyst who posts estimates on the Institutional Brokers' Estimate System. They 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.
, an investment manager, has been rated buy since October 2005. The company has an impressive record of growth in revenue, net income and earnings per share, along with good cash flow from operations. BlackRock recently reported third-quarter earnings of $255.2 million, or $1.94 a share, up from $18.9 million, or 28 cents a share, a year ago.
These strengths should outweigh the fact that the company's return on equity has been disappointing. Securities-brokerage and investment-banking firms and other stocks in this sector are highly sensitive to interest rate changes, equity market performance and the general health of the economy.
T. Rowe Price
, another investment manager, has also been rated a buy since October 2005. The company reported third-quarter net income of almost $175 million, or 63 cents a share, up from $128 million, or 46 cents a share, a year ago. Net revenue rose 27% year over year to $571 million, and assets under management totaled $396.8 billion, up 4.5% since June 30. Net revenue rose 27% year over year to $571 million. Return on equity totaled 23.51% at the end of the third quarter, surpassing both the industry and broader market averages.
During the quarter, the company repurchased 1.59 million shares, and it still has 16.64 million common shares remaining under its current repurchase authorization plan.
Risks include any unexpected downturn in the securities markets and the economy in general.
( PCU) mines, smelts and refines copper in southern Peru. It has had a buy rating since October 2005. The company's earnings per share improved by 20.3% to $2.13 per share in the third quarter compared with the same period last year, continuing a two-year pattern of positive EPS growth.
Southern Copper's stock price increased by 171.89% in the 12 months before Oct. 31, and it should continue to move higher. The company's revenue increased by 13.7% in the third quarter compared with the same period last year, although that figure trailed the industry average of 29.7%. Although no company is perfect, TheStreet.com Ratings does not currently see any weaknesses that are likely to detract from the generally positive outlook.
produces, sells and distributes industrial gases. It has been rated a buy since November 2005. The buy rating is supported by the company's robust revenue growth, expanding profit margins, increased net income and notable return on equity.
Third-quarter profit climbed 23% to $305 million, or 94 cents a share, while revenue increased 13% to $2.37 billion. The company's Asian and South American segments grew the most, supported by new business and project start-ups, while North America saw continued stable growth. Higher sales, improved pricing, cost efficiency and productivity programs helped the gross profit margin to grow by 121 basis points to 41.23%.
Risks to the company's performance include increase in the leverage level to 0.82 from 0.71, led by a 26.1% surge in total debt and the unfavorable effect of currency fluctuations.
L-3 Communications Holdings
, a military-equipment company, has been rated a buy since October 2005. Third-quarter net income rose 21% over a year ago. Revenue increased by 11.1% during the same period, outpacing the industry average of 8.5%.
L-3's earnings per share grew by 19.1% and the company's stable EPS growth over the past year indicates that it has sound management over its earnings and share float. Its net operating cash flow rose 24.41% to $324.10 million during the third quarter compared with the same period last year.
L-3 Communications said it expects 2008 earnings to be within the range of Wall Street's expectations. Though the company's stock price rose by 36.16% in the 12 months prior to Nov. 1, it should continue to move higher.