Each business day, TheStreet.com Ratings 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 we focus on mid-caps. These are stocks of companies that have market capitalizations of between $500 million and $10 billion that 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.
is a for-profit post-secondary education services corporation that offers a variety of academic programs through wholly-owned Strayer University. Our
for Strayer has not changed since March 2003 and is based on a variety of strengths that include the company's growth and its favorable returns, along with a surge in enrollment and a largely solid financial position.
For the first quarter of fiscal 2009, Strayer's revenue growth of 28.2% year over year slightly outpaced the industry average growth of 19.9%. This growth was driven by increased student enrollments and a 5% increase in tuition fees since January 2009. Revenue growth seems to have helped expand the company's bottom line, as earnings per share improved 26.2% when compared to the same quarter last year. Net income also increased, rising to $29.05 million from $23.52 million a year ago. Strayer's gross profit margin improvement of 128 basis points is a further sign of strength. Higher earnings combined with a lower asset and equity base to help drive returns on assets and equity higher in the first quarter. Stayer has no debt to speak of, giving it a debt-to-equity ratio of zero, which we consider to be a favorable sign. In addition, a quick ratio of 1.47 indicates that the company should be able to avoid short-term cash problems.
Management stated that it was pleased with Strayer's first quarter financial performance and the strong student enrollment for the spring term. Strayer announced that its first quarter revenue and earnings results were records for the company. However, the company faces challenges from a deteriorating cash balance. In addition, the company incurred higher costs related to support the increase in student enrollments and building the Strayer University brand, and these costs could restrict the company's financial performance going forward. Finally, the company's stock is trading at a premium valuation, but we feel that the strengths detailed above justify the higher price point at this time.
develops and markets healthcare information systems that automate medical and dental practices, networks of practices such as physician hospital organizations, ambulatory care centers, community health centers, and medical and dental schools. We have
since November 2001 due to its efficiency, solvency, and growth in revenue, net income and EPS. Solid stock price performance also supports this rating.
For the third quarter of fiscal 2009, the company reported that its revenues rose 36.1% year over year. The company announced that its net revenue results were a record for the company. A 15.0% improvement in EPS implies that the revenue growth trickled down to the bottom line. The company has achieved positive EPS growth routinely over the past two years, and we feel that this trend should continue. Net income also increased in the third quarter, rising 17.3% from $11.21 million to $13.15 million. Quality Systems has no debt to speak of, giving it a debt-to-equity ratio of zero. We consider this a favorable sign, as is a quick ratio of 2.02, which demonstrates the company's ability to cover its short-term liquidity needs.
Quality Systems' stock has risen over the past year, reflecting the earnings growth and other positive factors like the ones cited above. Although this increase has driven to the stock to a level that is somewhat expensive to the rest of the Software industry, we feel that the company's strengths justify the higher price level at this time.
provides integrated information management solutions and services for local governments in the United States, Canada, Puerto Rico, and the United Kingdom. It has been
since July 2005 because of its efficiency, solvency, expanding profit margins, and growth in net income and revenue.
For the first quarter of fiscal 2009, Tyler reported revenue growth of 17.2% year over year. This was higher than the industry average of 8.9%, and appears to have helped boost EPS, which improved from 8 cents to 16 cents per share. Net income increased 92.1%, rising from $3.13 million to $6.01 million. The company has a strong gross profit margin of 45.90%, which has increased from the same quarter last year. Tyler's return on equity can also be considered a modest strength, as it has improved slightly from 13.73% to 15.61%. In addition, a very low debt-to-equity ratio of 0.07 implies that the company has managed its debt levels very successfully.
Management was pleased with Tyler's strong start to fiscal 2009, but did not make any changes to its previously announced 2009 guidance because of the current economic climate. Although the company shows weak operating cash flow, we feel that the strengths detailed above outweigh any potential weakness at this time.
( SY) provides enterprise and mobile software solutions for information management, development and data integration in commerce, communications, finance, government, defense, manufacturing, transportation and healthcare. We have
since October 2004. This rating is supported by such factors as the company's growth, efficiency, and solvency.
For the first quarter of fiscal 2009, Sybase reported a slight revenue increase of 2.8% year over year. This growth appears to have trickled down to the company's bottom line, improving EPS from 24 cents to 33 cents over the past year. Net income increased 29.4% when compared to the same quarter a year ago, rising from $21.7 million to $28.09 million. Net operating cash flow increased slightly to $97.38 million, while the company's gross profit margin is currently very high at 78.6% and has increased from the same quarter a year ago.
Management announced that Sybase's first quarter results were the best ever for the company. Looking ahead to the second quarter, the company raised its total revenue guidance by 5% to 6% to a range of $270 million to $275 million. The company also forecasts its GAAP EPS to be in a range of 37 cents to 39 cents per share. Although no company is perfect, we do not currently see any significant weaknesses that are likely to detract from Sybase's generally positive outlook.
( MFE) is a security technology company that secures systems and networks from known and unknown threats worldwide. Our
for this stock has been in place since April 2008. The rating is supported by such strengths as the company's solid stock price performance, good cash flow from operations, and growth in net income, revenue and EPS.
For the first quarter of fiscal 2009, the company reported revenue growth of 21.1% year over year, greatly exceeding the industry average of 9.3%. This growth appears to have helped boost EPS, which improved significantly in the first quarter. We feel that McAfee's trend of positive EPS growth over the past two years should continue going forward. Net income also increased significantly in the first quarter, rising 77.2% from $30.17 million to $53.46 million. Additionally, net operating cash flow surged 104.52% when compared to the same quarter last year.
Management announced that McAfee's first quarter performance included record quarterly revenue and operating cash flow results. The company also announced second quarter guidance indicating that it expects net revenue of $455 million to $475 million and GAAP net income of 28 cents to 32 cents per diluted share. Although no company is perfect, we do not see any significant weaknesses that are likely to detract from the generally positive outlook for McAfee's stock.
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.