Each business day, 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 -- based on data from the close of the previous trading session. Today, fast-growth stocks are in the spotlight. These are stocks of companies that are projected to increase revenue and profit by at least 12% in the coming year and rank near the top all stocks rated by our proprietary quantitative model, which looks at over 60 factors.
In addition, the stocks must be followed by at least one financial analyst who posts estimates on the Institutional Brokers' Estimate System. Please note that definitions of revenue vary by industry, and this screen does not make adjustments for acquisitions, which can materially affect posted results. Likewise, earnings-per-share growth may be affected by accounting charges, share repurchases and other one-time items.
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.
is an international higher education company that operates DeVry University, Ross University, Chamberlin College of Nursing, and Becker Professional Review. DeVry University offers career-oriented undergraduate and graduate programs in technology, business, and management. Classes are offered at a number of locations, as well as through DeVry University Online. Ross University is one of the largest medical and veterinary schools in the world. The basic curriculum is taught at campuses in Dominica and St. Kitts/Nevis, while clinical rotations are carried out at teaching hospitals and veterinary schools throughout the United States. Chamberlin College of Nursing, previously known as Deaconess College of Nursing is a national nursing school, while Becker Professional Review provides professional education to clients in accounting and finance-related professions.
The company has been rated a buy since January 2007. DeVry's strengths can be seen in a variety of areas, such as its impressive record of earnings-per-share (EPS) growth, good cash flow from operations, robust revenue growth, and largely solid financial position. The company reported revenue growth of 21.3% year-over-year in the first quarter of fiscal 2009. This growth outpaced the industry average of 12.7%, and it also appears to have helped boost EPS, which improved 29.7% when compared to the same quarter last year. Net operating cash flow increased 21.0% to $96.82 million in the first quarter. DeVry has a very low debt-to-equity ratio of 0.21, which implies that the company has been very successful at managing its debt levels. During September 2008, DeVry completed the acquisition of U.S. Education, the parent company of Apollo College and Western Career College, which operates 17 campus locations in the western United States.
Management stated that DeVry's strong first quarter results were driven by a strategic plan to increase enrollment through improved marketing and recruiting. The acquisition of U.S. Education also helps this strategic plan by allowing DeVry to further diversify its educational offerings. The company is confident that it should be able to continue maximizing shareholder value and achieving long-term growth goals despite a tough economy due to its diversified portfolio. It is important to remember that a quick ratio of 0.69 indicates a potential problem in covering short-term cash needs. In addition, the company shows low profit margins. All the same, we feel that the strengths detailed above are enough to outweigh any potential weaknesses at this time.
is a biopharmaceutical company that engages in the research, development, and commercialization of pharmaceutical products for the anti-infective market. Headquartered in Lexington, Massachusetts, the company operates primarily in the United States. Its products focus on the medical needs of the acute care environment. The company's flagship drug is CUBICIN (daptomycin for injection), the first IV antibiotic from a class of antiinfectives called lipopeptides. This drug, which was launched in the U.S. in November 2003, contains a novel mechanism of action that specifically targets Gram-positive bacteria. It has been shown to cause rapid bacterial cell death in vitro. Cubist was founded in 1992 and employs more than 500 people.
We recently upgraded Cubist from a hold to a buy on Oct. 17. Our rating is supported by a number of strengths, such as its robust revenue growth, solid stock price performance, and expanding profit margins. Growth in net income and earnings per share (EPS) also contribute to the company's strengths. The company reported 40.9% year-over-year revenue growth in the third quarter of fiscal 2008, contributing to an EPS improvement of 37.5%. EPS climbed from $0.32 in the third quarter of fiscal 2008 to $0.44 in the most recent quarter. The company has, in fact, demonstrated a pattern of positive EPS growth over the past two years, and we feel that this trend is likely to continue. Net income also increased in the third quarter, increasing 39.5% from where it was a year ago. Although Cubist's gross profit margin is very high at 79.10%, it has managed to decrease that result compared to the prior year's quarter. In addition, the company's net profit margin of 24.80% compares favorably to the average for the biotechnology industry.
The stock price is not only higher than it was a year ago, but it also outperformed the S&P 500 over the same period of time. Strong earnings growth appears to have been key to this growth, although other factors clearly played a role as well. Although even the best stocks can fall in an overall down market, we feel that this stock still has good upside potential under any other market conditions. Although no company is perfect, we do not currently see any significant weaknesses that are likely to detract from Cubist's generally positive outlook.
engages in sourcing, quality assurance, regulatory support, marketing, and distribution of chemically derived pharmaceuticals, biopharmaceuticals, specialty chemicals, and crop protection products. The company maintains locations in the U.S., the Netherlands, France, Singapore, Germany, India, and China. Aceto distributes over 1,000 pharmaceuticals and chemicals, which are primarily used as raw materials by clients in the pharmaceutical, agricultural, color, surface coating/ink and general chemical consuming industries.
We have rated Aceto a buy since August 2008. Our rating is based on a variety of strengths, including the company's impressive record of earnings per share (EPS) growth and its largely solid financial position. For the first quarter of fiscal 2009, the company announced quarterly sales of $93.8 million, an increase of 18.0% year-over-year. With a continued focus on cost containment and a shift in business mix contributed to a close to 200 basis point expansion in gross margin to 20.18% in the most recent period versus 18.31% a year earlier. Aceto's first quarter net income rose by over 250% when compared to the same quarter a year ago. This growth in turn helped boost EPS, which improved from $0.05 in the first quarter of fiscal 2008 to $0.18 in the most recent quarter. This continued a pattern of positive EPS growth demonstrated by Aceto over the past two years.
Management reported that sales growth in both the Health Sciences and Chemicals & Colorants segments (up 21.3% and 19.2% year over year, respectively) more than offset a 23.2% decrease in Crop Protection sales. The strength in the Health Sciences segment was attributed mainly to increased sales from foreign operations - particularly in Europe - and to increases in domestic generic and nutritional products. Sales growth in Chemicals & Colorants experienced good growth in pigments, dyes, and miscellaneous intermediates, as well as a boost from foreign operations, according to management. One weakness in the company's results was relatively weak operating cash flow generation. However, with a very clean balance sheet and positive working capital, we feel the positives far outweigh any negatives for the company at this time.
is a provider of information technology (IT) services and solutions to U.S. federal government agencies. The company focuses on designing, implementing, maintaining, and upgrading IT systems and networks by leveraging its skills across four core service offerings: network engineering; information assurance; systems development and integration; and enterprise systems management. A majority of the company's revenue comes from the delivery of mission-critical IT services to defense and intelligence agencies. Approximately three-quarters of NCI's employees work at customers sites, which gives the company a unique perspective on its customers' missions and technical environment.
NCI has been rated a buy since February 2008 based on its healthy growth in revenue and net income, solid stock price performance, impressive record of earnings per share (EPS) growth, and return on equity. For the third quarter of fiscal 2008, the company reported revenue growth of 18.7% year-over-year. This growth represents record revenue results for the company, and appears to have trickled down to NCI's bottom line, improving EPS by 28.0%. EPS increased from $0.25 in the third quarter of fiscal 2007 to $0.32 in the most recent quarter. Net income also increased, rising 31.6% from $3.34 million to $4.40 million. Return on equity improved slightly from 16.18% to 16.58%. NCI's strong earnings growth has helped the stock price climb higher over the past year.
Management announced that it was pleased with what it considered excellent quarterly results and considers NCI well-placed in its markets and with its customers for fiscal 2009. The company is confident about its business model and plans to continue with its strategic plan of focusing on organic growth supplemented with strategic acquisitions that generate long-term, sustainable value. While an overall down market can negatively affect any stock, we feel that the company has good upside potential in any other market, despite the fact that it has already risen in the past year. In addition, we believe that the strengths detailed above outweigh the fact that the company shows low profit margins.
provides technologies and solutions for mission-critical national security programs for the intelligence community, the space community, and various departments and agencies of the U.S. federal government. The company's areas of expertise include software development, systems engineering, enterprise security architecture, information assurance, intelligence operations support, network and critical infrastructure protection, information technology, communications integration and engineering support.
ManTech has been rated a buy since March 2005. Our rating is based on strengths such as the company's robust revenue growth, largely solid financial position, and record of earnings per share (EPS) growth. For the third quarter of fiscal 2008, revenue rose by 26.8% year-over-year. This increase was primarily the result of a business strategy focused on high-end defense and intelligence markets supporting U.S. national security. Revenue growth appears to have helped boost earnings per share, which improved 31.4% when compared to the same quarter a year ago. The EPS increase from $0.51 to $0.67 represents the continuation of a pattern of positive EPS growth demonstrated by ManTech over the past two years, a trend which we feel should continue. Net income also increased in the third quarter, rising from $17.48 million in the third quarter of fiscal 2007 to $23.86 million in the most recent quarter. ManTech's very low debt-to-equity ratio of 0.007 and quick ratio of 1.42 illustrate the company's successful management of debt levels and ability to avoid short-term cash problems.
Management announced it was pleased with the third quarter results, as strong performance and excellent cash flow helped provide necessary flexibility in a challenging economic environment. Based on strong business momentum in its national security and defense business, the company set EPS guidance at $0.67 to $0.70 for the fourth quarter and $2.53 to $2.56 for full-year fiscal 2008. These ranges represent 10% to 15% growth over the fourth quarter of fiscal 2007 and 30% to 31% growth over full-year fiscal 2007. The company currently shows low profit margins, but we feel that the strengths detailed above outweigh any potential weakness.
Our quantitative rating 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.