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, mid-cap stocks are in the spotlight. These are stocks of companies that have market capitalizations of between $500 million and $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.
Today leads off with
, which engages in the design, manufacture and distribution of valves and fluid control products. It has been rated a buy since September 2005.
The company's year-on-year revenue growth of 14.9% in the second quarter outpaced the industry average of 5.1%. Its earnings improved by 50.0% in the same timeframe, continuing a two-year pattern of positive EPS growth. TheStreet.com Ratings believe this trend will continue.
Circor has also seen good cash flow from operations and its stock price inccreased 50.92% in the 12 months prior to Sept. 28. These strengths outweigh the company's low profit margins.
engages in the design, manufacture and marketing of cleaning solutions. It has been rated a buy since September 2005. Its revenue increased 9.4% in the second quarter compared with the same period last year, exceeding the industry average of 5.1%.
The revenue growth appears to have trickled down to the company's bottom line, as EPS improved by 14.6% over the same timeframe, and earnings have grown consistently over the past two years. The company's debt-to-equity ratio of 0.02 is below that of the industry average, implying that there has been very successful management of debt. In addition, Tennant's quick ratio of 1.84 demonstrates the ability to cover short-term liquidity needs.
Although the company may harbor some minor weaknesses, they are unlikely to have a significant impact on results.
Specialty insurance products and services provider
The Midland Company
has been rated a buy since September 2005. The company's second quarter revenue increased by 18.7% compared to the same period last year, outpacing the industry average of 13.2%. Its debt-to-equity ratio of 0.16 is also better than the industry average, suggesting that there has been successful management of debt.
Earnings increased 150% to $1.25 per share in the second quarter compared to 50 cents a share in the same period last year. The EPS growth has contributed to a stock price appreciation of 30.90% in the 12 months prior to Sept. 27.
And while any stock can fall in a major bear market, the stock should continue to move higher. Given these strengths, Midland's low profit margins are no threat to the buy rating.
Telecom services provider
has been rated a buy since August 2005. Its revenue increased 17.9% in the second quarter compared with the same period last year, supported by strong sales across its business segments. Net income grew by 83.4% over the same time frame, driven by margin expansion, lower interest expense and lower taxes.
The company also provides a good dividend yield at current market prices. The principal risks include termination of the company's exclusive right to provide wireline local and long-distance telephone services in Guyana as well as any adverse regulatory developments or economic conditions. Also, intensifying competition poses a significant threat to Atlantic Tele-Network's future prospects.
Specialty chemical company
has been rated a buy since September 2005. Powered by strong earnings growth, the company's stock has jumped 45.68% over the 12 months prior to Sept. 27, and it should continue to move higher.
Lubrizol has demonstrated a pattern of positive EPS growth over the past two years, a trend that TheStreet.com Ratings expects it will maintain. Net income growth has greatly exceeded that of the
. These strengths outweigh the company's low profit margins.