This list, updated daily, is based on data from the close of the previous trading session. These are stocks of companies with market capitalizations of more than $10 billion that rank near the top of all stocks rated by our proprietary quantitative model, which looks at more than 62 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.
, has been rated a buy since January 2005, and it deals with copper through operations ranging from mining to production, sales and marketing. Among the company's strengths are robust revenue, with fourth-quarter 2006 growth of 43.4% compared with the same period the previous year, a minuscule debt-to-equity ratio of 0.12 and a return on equity of 39.48% for the quarter.
Phelps' net profit margin of 40.90% significantly outpaced the industry average. The company's share price grew 54.01% in 2006, and without any glaring weaknesses, Phelps Dodge should continue to outperform the market and its peers.
Rated a buy since November 2004,
produces industrial and consumer instruments, technologies and tools, and its products have created strong core revenue growth and allowed key acquisitions. Though its returns are down of late, the company's recent cost-cutting measures deserve commendation, and position it for smoother operations going forward. Total revenue grew by 20.2% to $9.60 billion in 2006, aided in no small part by the acquisition of eight businesses in the year's first nine months alone.
Possible risks include poor liquidity for short-term cash needs, sagging return-on-equity and return-on-assets figures and obstacles in the integration of the recently acquired vision care company Vision Systems.
has had a buy rating since November 2004, thanks to strong financial performance, growing demand for its commercial satellites and advanced defense systems, and an expanding product base. The company has increasingly sought civilian contracts in air traffic management and IT outsourcing as it seeks to lessen its reliance on the U.S. government. Lockheed has also focused on international expansion through acquisitions and contracts with India and Pakistan, countries that are ramping up their military spending.
The steady decline of the company's aeronautics segment's revenue is cause for concern. Until international sales can offset sluggish domestic sales for F-16 jets, revenue growth for the segment in coming quarters is unlikely.
has been rated a buy since November 2005. Its revenue growth in the third quarter of 2006 of 6.7% to $4.78 billion, compared with the same period in the previous year, draws praise. The company has improved performance with its private brands, a wider base of products, leveraged salary costs, heightened online sales and improved merchandise flow.
J.C. Penney's strategy to continue this growth, the "2005 to 2009 Long Range Plan," involves expanding its range of exclusive and private brands, appealing to more-affluent customers, and the launch of at least 150 new "off-mall" stores, and making the shopping experience easier for customers. Further increases of gasoline prices or interest rates could threaten the buy rating, as could the recent introduction of trendy new brands by competitors such as
deals in specialty metal production and has retained its buy rating since July 2005. With its increasing margins; steady demand from customers in the aerospace, oil and gas, chemical processing and medical-equipment industries that are willing to pay increasingly higher prices; and a strong, diversified revenue growth, ATI has recently been trading at or above its 52-week high.
Further success relies on sustained cost reductions, continued growth opportunities for specialty metals and the successful phase IV expansion of its premium-grade titanium facility in Rowley, Utah, a $325 million investment to bolster production of titanium alloys for aerospace and defense clients.
Rated a buy since September 2004,
runs insurance and investment management businesses through its various subsidiaries. Acquiring Jefferson-Pilot Corporation in April 2006, one of the largest life insurance companies in America, made Lincoln an industry leader across all of its product lines, and this should create annualized, pretax savings of $180 million starting from the third year of the acquisition. Lincoln's strong market share, cash flow, revenue growth and reliable demand from the baby-boomer generation position it for steady earnings growth.
Potential risks to the buy rating include any adverse regulatory actions, any excessive decrease in the equity market that causes account values to decline, or unanticipated integration problems related to the JP acquisition.
is a real estate investment trust that owns, manages and is developing 2,340 properties in North America, Europe and Asia. The company has warranted a buy rating since February 2005 and has had EPS growth over the past two years, including a 15.0% improvement in the fourth quarter of 2006 compared with the same period the previous year. That quarter also saw net income grow 27.2% vs. 2005's final quarter, increasing from $135.76 million to $172.66 million.
The company's shares increased 25.66% in 2006, outperforming the
index, and with no major weaknesses, it is positioned to continue its ascent.
Rated a buy since November 2004, computer maker
has seen strong demand for its products, which has created robust top-line growth, thanks in part to acquisitions of complementary technologies focused on business growth. Also, because of successful cost-cutting measures, H-P needed quadruple digits to tally its earnings growth (1,500.00%) and net income percentage increase (1,783.6%) in third-quarter 2006 compared with the same period a year ago.
Given the fierce competition in the laptop, desktop and printer markets from rivals such as
and Lexmark International
, H-P will continue to face constant pricing pressure and will likely need to cut prices to preserve its formidable market share.
, an asset-management company, has earned a buy rating since January 2005. Though the company's steep stock appreciation over the past year has lifted its price level well above its industry peers, we believe its considerable strengths -- expanding profit margins, small debt-to-equity ratio and stockholders' equity increasing 1,123.17% from the same quarter last year --validate the high price level.
Keep an eye on BlackRock's return on equity, which has plummeted when compared with the same quarter in 2005 and is an indication of potential weakness inside the company.
Investment advisor and mutual fund company
T. Rowe Price
has earned a buy rating since 2005. In 2006, the company boosted its EPS by 20.63%, increased sales by 20.02% and improved net income by 20.63%. This helped contribute to a 46.60% gross profit margin. These strong financial numbers didn't go unnoticed on Wall Street, as shares increased an impressive 25.55% in the past year. Despite being somewhat expensive compared with its peers, we believe T. Rowe Price's significant strengths justify the higher price.