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, all-around value stocks are in the spotlight. These are stocks of companies that meet a number of criteria, including annual revenue of more than $500 million; lower-than-average valuations, such as a price-to-sales ratio of less than 2; and leverage that is less than 49% of total capital.
In addition, they must rank near the top of all stocks rated by TheStreet.com Ratings' 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.
First up is
, which sold its car business to Ford in 1999, but still makes trucks, buses, construction equipment and aircraft engine parts. It has had a buy rating since March 2005.
The company has shown stellar revenue growth, solid stock price performance, outstanding EPS growth and compelling growth in net income. These strengths outweigh the company's low profit margins.
is the owner of one of the largest rail networks in the U.S.; it has been rated a buy since March 2005. It has displayed strong revenue growth, impressive EPS increases and significantly improved net operating cash flow.
These strengths outweigh the company's low profit margins.
is involved in every aspect of crude oil and natural gas, from exploration to distribution. It has earned a buy rating since March 2005. The company has shown impressive revenue growth, increased net income and improved return on equity, and it is focused on expanding its oil and gas production capacity in response to high crude oil prices.
Risks to the buy rating include any unexpected sharp downturn in oil and gas prices that would not only cause a drag on its profits but could render several of its recent expansion plans unviable.
Crude and natural gas explorer
has been rated a buy since March 2005. It has shown strong stock price appreciation and improvement on its low profit margin.
These strengths outweigh the company's subpar net income growth.
has chugged along with a buy rating since March 2005. The company has shown a wide range of strengths, including revenue growth, significant EPS improvements and net income growth that has towered over that of its industry peers.
The company's low profit margins pose no threat to the buy rating.