Each business day, TheStreet.com Ratings TheStreet.com Ratings compiles a list of the top five stocks in one of five categories -- fast-growth, all-around value, large-cap, mid-cap and small-cap -- 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 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.
manufactures metal and plastic consumer goods packaging products, including metal food containers, vacuum closures for food and beverage products, and high density polyethylene and polyethylene terephthalate containers for the personal care market. Our
has been in place since May 2004. The rating is based on such strengths as the company's growth, efficiency, and return on equity.
For the first quarter of fiscal 2009, Silgan reported a slight drop in revenue, which does not seem to have affected the company's bottom line. EPS improved 30.9% year over year, and we feel that Silgan's recent trend of positive EPS growth should continue. Net income also improved 30.9% in the first quarter, rising from $21.16 million to $27.7 million. Although the company posted a rather low gross profit margin of 20.3%, it has managed to increase the gross profit margin when compared to the same quarter last year, and its net profit margin of 4.2% compares favorably to the industry average. In addition, return on equity improved slightly in the first quarter, rising from 22.33% to 25.71%, and can be viewed as a modest strength for the organization.
Management stated that Silgan's fiscal 2009 outlook remains, based on its first quarter results. The company reaffirmed its fiscal 2009 guidance, indicating that it expects to achieve net income per diluted share in the range of $3.75 to $3.95. Despite the company's weak operating cash flow, we feel that the strengths detailed above outweigh any potential weakness at this time.
Family Dollar Stores
operates a chain of almost 6,000 retail discount stores in a 44-state area, providing primarily low to lower-middle income consumers with a wide range of general merchandise at highly competitive prices in convenient neighborhood stores. We have
since July 2008. The rating is based on the company's outstanding fundamentals and recession-resistant business model.
The company reported on April 8 that its revenue increased slightly in the second quarter of fiscal 2009, rising 8.7% year-over-year. This growth appears to have helped boost EPS, which improved 33.3% from 45 cents a year ago to 60 cents in the most recent quarter. Family Dollar's net income jumped 32.9%, increasing from $63.6 million to $84.14 million. The company's return on equity has also slightly improved from where it was a year ago. This change from 18.34% to 19.1% can be seen as a modest strength for Family Dollar.
The company feels that its second quarter successes are due not only to budget-friendly consumer behavior generated by the current economic conditions, but also by the company's own investments in the enhancement of consumer's shopping experience. Looking forward to the third quarter, the company expects an increase of 7% to 9% in its net sales, along with EPS in the range of $0.54 to $0.58 per share. While we see the company's low profit margins as a potential weakness, we believe that the strengths detailed above justify the buy rating at this time and should continue to help Family Dollar's stock to move higher despite the fact that it has already enjoyed a very nice gain of 82.7% in the past year.
is an energy services holding company that generates electricity and distributes and transmits natural gas in the U.S., Europe, Canada, and Mexico. A large portion of its business is conducted in California. We
in January 2009. Our rating is based on strengths such as Sempra's solvency, net income and EPS growth, and return on equity.
Although Sempra's revenue dropped in the fourth quarter of fiscal 2008, the company did outperform in comparison with the industry average. The declining revenue does not appear to have hurt the company's bottom line, as EPS improved 18.2% year over year, rising from 31cents to 35 cents. Net income also increased in the fourth quarter, rising 10.3% when compared to the same quarter a year ago. Sempra's return on equity improved slightly and can be considered a modest strength for the company. In addition, a debt-to-equity ratio of 0.93 is somewhat low and seems to indicate that the company has successfully managed its debt levels.
Looking ahead to fiscal 2009, the company reaffirmed its full-year EPS outlook of $4.35 to $4.60 per share. The company shows weak operating cash flow, but we feel that the strengths detailed above outweigh any potential weakness at this time.
develops, manufactures, and integrates defense electronic and electro-optic systems primarily in Israel, the United States, and Europe. We have
since April 2007 based on the company's robust revenuegrowth, compelling growth in net income, good cash flow from operations, notable return on equity and impressive record of earnings per share growth.
For the fourth quarter of fiscal 2008, revenue growth came in higher than the industry average of 4.6%. Since the same quarter one year prior, revenues rose by 18.1%. Growth in the company's revenue appears to have helped boost EPS, which improved significantly from 75 cents to $2.48. Although the company has demonstrated a pattern of positive earnings per share growth over the past two years, we anticipate underperformance relative to this pattern in the coming year. Net income increased dramatically in the fourth quarter, rising 229.7% from $31.43 million to $105.27 million. A further sign of significant strength within the corporation is its increasing return on equity, which grew from 14.28% a year ago to 28.21% in the most recent quarter. Net operating cash flow also increased notably in the fourth quarter, rising 106.56% when compared to the same quarter last year.
Management stated that Elbit ended 2008 in a strong position, with potential for continued growth. We see the company as having relatively poor debt management on most measures that we evaluated, but nevertheless, we feel that the strengths outlined above outweigh any weaknesses and the stock has strong upside potential, given current market conditions.
American Italian Pasta
( AIPC) produces and markets dry pasta in North America. We have
since November 2008 based on its growth and solid stock performance.
For the first quarter of fiscal 2009, the company reported very impressive revenue growth of 53.2% year over year, greatly exceeding the industry average of 1.8%. The growth helped boost EPS, which improved significantly from 7 cents to $1.23. American Italian Pasta has demonstrated a pattern of positive EPS growth over the past two years, and we expect this trend to continue. Net income also increased significantly, rising 1767.1% when compared to the same quarter last year, rising from $1.39 million to $26.03 million. An additional sign of strength for the company is its increasing return on equity, which improved from1.83% a year ago to 18.87% in the most recent quarter.
Management credited AIPC's growth strategy for the company's financial success in the first quarter. The company shows low profit margins, but we feel that the strengths detailed above outweigh any weaknesses at this time. In addition, the stock price has risen 1657.14% over the past year, and we feel that the stock still has upside potential under most market conditions.
Our quantitative rating, which can be viewed for any stock through our stock rating screener, is based on a variety of historical fundamental and pricing data and represents our opinion of a stock's risk-adjusted performance relative to other stocks. However, the rating does not incorporate all of the factors that can alter a stock's performance. For example, it doesn't always factor in recent corporate or industry events that could affect the stock price, nor does it include recent technology developments and competitive dynamics that may affect the company.For those reasons, we believe that a rating alone cannot tell the whole story and that it should be part of an investor's overall research.