BOSTON (TheStreet) -- The following three companies reside in the top ranks of our 5,000-plus coverage universe for growth stocks and receive "buy" ratings from most analysts. Their shares have outperformed the U.S. stock market during the past 12 months.
3. Cash America
provides pawn-lending and cash-advance services. During the past three years, it has increased revenue 17% annually, on average. Its stock is up 16% in 2010, beating U.S. stock-market indices and consumer-finance peers.
: Fourth-quarter profit more than doubled to $34 million, or $1.09, as revenue grew 16%. The operating margin extended from 14% to 18%. Cash America holds $46 million of cash and $430 million of debt, translating to a debt-to-equity ratio of 0.6.
: Cash America has advanced 93% in the past year, beating stock-market benchmarks. It trades at a price-to-projected-earnings ratio of 9.8, a price-to-sales ratio of 1.1 and a price-to-cash-flow ratio of 4.4, 47%, 34% and 38% discounts to industry averages.
: Of analysts covering Cash America, nine, or 82%, advise purchasing its shares and two recommend holding them.
Sidoti & Co.
expects the stock to gain 28% to $52.
predicts the shares will hit $45, leaving a potential 11% gain.
2. Catalyst Health Solutions
is a pharmacy-benefits manager. During the past three years, it has boosted revenue 32% annually, on average. Its stock is up 19% in 2010.
: Fourth-quarter profit increased 27% to $18 million, or 41 cents, as revenue climbed 8.8%. The operating margin inched up from 3.2% to 3.9%. The balance sheet stores $152 million of cash, converting to a quick ratio of 1.3, and no long-term debt.
: Catalyst has doubled during the past year, beating U.S. stock-market indices. It sells for a price-to-sales ratio of 0.6, a 19% discount to its peer-group average. It's expensive based on projected earnings, book value and cash flow per share.
: Of researchers following Catalyst, 10, or 63%, rate its stock "buy," five rate it "hold" and one ranks it "sell."
expects Catalyst to rise 16% to $50.
think the stock is near its fair value of $44.
1. Western Digital
makes hard drives. During the past three years, it has increased revenue 19% annually, on average. Its stock has dropped 5.4% in 2010.
: Fiscal second-quarter profit rose thirty-fold to $429 million, or $1.85, as revenue expanded 44%. The operating margin extended from 6.7% to 18%. Western Digital has $2.4 billion of cash and $444 million of debt, equal to a debt-to-equity ratio of 0.1.
: Western Digital has doubled during the past year, outpacing benchmarks. It trades at a price-to-projected-earnings ratio of 6.6, a price-to-book ratio of 2.3 and a price-to-sales ratio of 1.1, 59%, 57% and 58% discounts to peer-group averages.
: Of firms rating Western Digital, 11, or 50%, advocate purchasing shares, 10 counsel holding and one says to sell them.
Needham & Co.
expects the stock to rise 41% to $59.
thinks the shares will touch $55.
-- Reported by Jake Lynch in Boston.