Each business day, 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, 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. 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 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% to $96.8 million in the first quarter. DeVry has a very low debt-to-equity ratio of 0.2, 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 U.S.
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 0.7 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. 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 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 32 cents in the third quarter of fiscal 2008 to 44 cents 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 79.1%, it has managed to decrease that result compared to the prior year's quarter. In addition, the company's net profit margin of 24.8% 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
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. 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 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% 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 20.2% in the most recent period versus 18.3% 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 5 cents in the first quarter of fiscal 2008 to 18 cents 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 and 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 and 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.
( CHTT) markets and manufactures a portfolio of branded over-the-counter healthcare products, toiletries and dietary supplements. We have rated Chattem a buy since March 2005. Our rating is supported by the company's revenue growth, expanding profit margins, and good cash flow from operations.
For the third quarter of fiscal 2008, revenue increased slightly, rising 2.7% year over year. Although EPS declined 13.1% and have been somewhat volatile recently, we feel that Chattem is poised for EPS growth in the coming year. The company's gross profit margin is currently very high at 73.5%. It has increased from the same quarter a year ago. In addition, the net profit margin of 12.5% is above the industry average. Although Chattem's debt-to-equity ratio of 2 suggests that its debt-management strategies should be reevaluated, a quick ratio of 1.1 indicates that the company has the ability to handle its short-term liquidity needs.
Management stated that its business has continued to have momentum in the first nine months of fiscal 2008, resulting in strong revenue and earnings growth for that period. This strength was supported by successful advertising, the strength of the company's primary brands, and its 2008 product launches. Based on the year-to-date results, the company raised its fiscal 2008 EPS guidance to a range of $4.20 to $4.25 as compared to an earlier estimate of $4.00 to $4.20. In addition, new product lines are expected to help the company continue its revenue growth into fiscal 2009.
and its subsidiaries lend or provide credit services to individuals who do not have cash resources or access to credit to meet their short-term cash needs. EZCorp has been rated a buy since January 2004.
For the fourth quarter of fiscal 2008, the company announced total revenue growth of 19% year over year. The company experienced its twenty-fifth consecutive quarter of year-over-year earnings growth, with net income increasing 44% and EPS improving significantly from 26 cents in the fourth quarter of fiscal 2007 to 37 cents in the most recent quarter. The unfavorable impact of lost store days due to Hurricane Ike and the favorable impact of foreign tax credit utilization were excluded from the EPS results, with results instead being primarily driven by the company's pawn operations in the U.S. and Mexico, according to management.
Looking ahead, the company has completed due diligence on two acquisition opportunities and will move ahead with the acquisitions of Pawn Plus and Value Financial Services. The Pawn Plus transaction, which will add 11 stores to EZCorp's portfolio, is expected to be complete in late November, while the Value Financial Services acquisition should be completed in the latter half of December. In addition, the company has plans to open 30 to 35 EZMoney locations in the U.S. and 30 to 35 Empeno Facil locations in Mexico, while monitoring regulations in Canada to look for opportunities to enter the market in provinces that adopt acceptable payday loan regulations.
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.
This article was written by a staff member of TheStreet.com Ratings.