Each business day, TheStreet.com Ratings TheStreet.com Ratings compiles a list of the top five stocks in one offive 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, large-cap stocks are in the spotlight.

These are stocks of companies with market capitalizations of over $10 billion that rank near the top of all stocks rated by our proprietary quantitative model, which looks at more than 62 factors. In addition, the stocks must be followed by at least one financial analyst who posts estimates on the Institutional Brokers' Estimate System. The stocks 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.

Gilead Sciences

(GILD) - Get Report

is a biopharmaceutical company that discovers, develops and commercializes therapeutics to advance the care of patients suffering from life-threatening diseases worldwide. We

upgraded Gilead to a buy

in October 2008.

For the third quarter of fiscal 2008, revenue increased 29.5% to $1.4 billion from $1.1 billion a year ago due to higher product sales. Product sales surged 39.1% to $1.3 billion from $961.9 million, driven by strong growth of antiviral product sales (these in turn make up the most significant portion of overall revenue for the company). Royalty revenue plunged 72.4% to $25.2 million from $91 million, hurt by decreased Tamiflu royalties from Roche. Contract and other revenue spiked 29.6% to $7.6 million from $5.9 million a year ago. Margins were squeezed, however, as cost growth outpaced that of revenue. EPS rose from 42 cents in the third quarter of fiscal 2007 to reach 52 cents in the most recent period, an increase of 23.8%.

During the quarter under review, the U.S. Food and Drug Administration granted marketing approval to Viread for the treatment of chronic hepatitis B. The FDA refused to approve the inhaled version of aztreonam lysine and asked the company to conduct another study. Gilead also announced it intends to repurchase $750 million of its shares on an accelerated basis under a $3.00 billion share repurchase program announced in October 2007. Recently,

Teva Pharmaceuticals

(TEVA) - Get Report

applied to the FDA for permission to make a generic version of Gilead's HIV drug, Truvada. Gilead responded with a patent infringement lawsuit that can halt generic entry for a period of up to 30 months. Investors should be aware that this and other patent-related threats can pose a significant operational risk to the company's prospects, and are always situations that require monitoring. Other risks include any other regulatory or legal affairs, as well as any government policies that are considered unfavorable to drug makers.


(MCD) - Get Report

primarily operates and franchises McDonald's restaurants. In total, the corporation has more than 30,000 restaurants in more than 100 countries. We have

rated McDonald's a buy

since March 2004, based on strengths such as its expanding profit margins and solid stock performance.

On January 26, the company reported that its fourth quarter global comparable sales rose 7.2%. Despite this, the company's revenues dropped slightly by 3.3% year over year. Earnings per share also declined 17.9% when compared to the same quarter a year ago. However, we are encouraged by the company's strong gross profit margin of 37.3%. McDonald's net profit margin of 17.70% is also considered a strength for the company, as it compares favorably to the industry average. In addition, McDonald's reported a 16% improvement in full year EPS when compared to fiscal 2007.

Management was pleased with what it considered strong results for fiscal 2008. In particular, the company was content with an increase in customers served per day to 58 million, which it attributed to a strategic focus on menu choice, food quality, and value. In addition, management cited positive results in comparable sales and guest counts across all segments in the fourth quarter of fiscal 2008. Although the company had sub par growth in net income, we believe that its strengths outweigh any current weaknesses and see good upside potential even though the stock has already enjoyed a nice gain in the past year.

Abbott Laboratories

(ABT) - Get Report

is a global, broad-based healthcare company that discovers, develops, manufactures, and sells a diversified line of products that range from nutritional products and laboratory diagnostics to medical devices and pharmaceutical therapies. Key products include pharmaceuticals like Humira and Simcor and nutritional products such as Ensure, Pedialyte, Pediasure, and Similac. We have

rated Abbott a buy

since April 2007, based on a variety of strengths that include the company's growth in revenue and net income, impressive record of earnings per share (EPS) growth, and expanding profit margins.

For the fourth quarter of fiscal 2008, the company reported revenue growth of 10.1% year over year. Revenue growth appears to have helped boost EPS, which improved 15.6% to 89 cents from 77 cents in the fourth quarter of fiscal 2007. Net income increased 27.7% when compared to the same quarter a year ago. Gross profit margin is rather high at 60.90%, but it has managed to decrease from the same period last year. In addition, a net profit margin of 19.30% compares favorably to the industry average.

Management was pleased with the company's strong results in 2008, including the fact that the company outperformed its growth expectations for the year. In addition, new product launches during 2008 significantly expanded the company's product portfolio. Due to its ongoing business momentum and previously enacted strategic actions, the company believes it is on target for double-digit growth in 2009. Previously issued guidance for fiscal 2009 was confirmed by management, with EPS expected in the range of $3.65 and $3.70. Although the stock itself has shown rather lackluster performance recently, we currently feel that the strengths detailed above are enough to balance any potential weakness. Keep in mind, however, that the Pharmaceuticals industry as a whole is vulnerable to patent expirations and legislative threats to pricing power.

Medco Health Solutions


is one of the nation's largest pharmacy benefit managers, providing sophisticated traditional and specialty pharmacy benefit programs and services for clients, members of client-funded benefit plans, and individual patients. We upgraded Medco to a

buy rating

in December 2008, based on such strengths as its growth, efficiency, and solvency.

The company reported its results for the fourth quarter of fiscal 2008 on Feb. 24. These results will be updated in our model soon, but for now, our rating is based on Medco Health's third quarter results. The company reported revenue growth of 15% year over year in the third quarter, boosted in part by record specialty pharmacy revenues of over $2 billion. This growth appears to have helped boost EPS, which improved 48.7% when compared to the same quarter a year ago. Net income also increased, rising 37.7% from $214.9 million to $295.7 million over the past year. We are encouraged by a trend of positive EPS over the past two years. Net operating cash flow surged 327.34% in the third quarter. In addition, a debt-to-equity ratio of 0.78 implies that Medco has been somewhat successful at managing its debt levels, although a relatively weak quick ratio of 0.81 shows the potential for future problems in this area.

In guidance announced with the third quarter results, management expected that Medco would continue to see strong growth across its businesses. At that time, the company reaffirmed its guidance for full-year 2008, including GAAP diluted EPS of $2.10 to $2.13 and diluted EPS of $2.30 to $2.33. For full-year 2009, Medco anticipated diluted EPS in the range of $2.67 to $2.77. The stock itself has had lackluster performance recently, but we feel that the strengths detailed above outweigh this weakness.

Baxter International

(BAX) - Get Report

is a medical products and services company, providing medical devices, pharmaceuticals, and biotechnology for the treatment of a variety of diseases including hemophilia, cancer, and kidney disease. Baxter has been

rated a buy

since May 2005, based on such positive investment measures as EPS growth, revenue and net income growth, notable return on equity, and expanding profit margins.

For the fourth quarter of fiscal 2008, the company announced on Jan. 22 that its financial results exceeded previously issued guidance. Revenue for the quarter increased slightly by 4% year over year. Although this growth was lower than the industry average, it may still have helped boost EPS, which improved by 23% when compared to the same quarter last year. Net income also increased, rising 19% from $478 million in the fourth quarter of fiscal 2007 to $569 million in the most recent quarter. The company attributed its financial success in the fourth quarter to continued business momentum, strong fundamentals, improved margins, and a lower tax rate. One final strength of the company is that its current return on equity exceeded that of the same quarter a year ago.

Looking ahead, management stated that it expects sales growth in the first quarter of fiscal 2009, along with earnings per diluted share of 80 cents to 82 cents. For the full year, Baxter anticipates earnings per diluted share of $3.70 to $3.78. Although the company shows weak operating cash flow, we believe that the strengths detailed above outweigh any potential weakness at this time.

Our quantitative rating, which can be viewed for any stock through our stock screener 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 a rating alone cannot tell the whole story and should be part of an investor's overall research.