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 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.
provides pest and termite control services and protection against termite damage, rodents, and insects through its subsidiaries. It also offers sanitation services to the food and commodity industries. We have
since November 2003 on the basis solvency, efficiency, and growth in net income, revenue and EPS.
For the first quarter of fiscal 2009, Rollins' revenue rose by 15.7% year over year, beating its industry's average growth of 1.5%. As a result, EPS improved 14.3%, continuing a trend of positive EPS growth over the past two years. Net income increased 14.2% when compared to the same quarter a year ago, rising from $13.84 to $15.81 million. The company's return on equity improved slightly when compared with the prior year's quarter and can therefore be construed a modest strength. Additionally, we consider Rollins' gross profit margin of 48.4% to be strong, while its net profit margin of 6.5% is above the industry average.
The company stated that it experienced gains in its commercial pest control and termite control businesses, despite a softening of residential pest control sales. Although the company may harbor some minor weaknesses, we do not currently see any that are likely to have a significant impact on future results.
is a global provider of products and technologies designed to treat advanced cardiovascular disease. The company has been
since February 2007. This rating is supported by the company's efficiency, solvency, and growth in net income, revenue and EPS.
Edwards Lifesciences reported that its results in the first quarter of fiscal 2009 were due in part to strong heart valve sales. Although the company's revenue was less than that of the industry average, it was able to report an increase of 5.6% year over year. This growth appears to have been enough to have helped boost EPS, which showed significant improvement when compared to the prior year's quarter, rising from 31 cents to $1.03 per share. We feel that the company's trend of positive EPS growth over the past two years should continue going forward. Net income surged in the fourth quarter, rising 232.4% from $18.20 million to $60.50 million. Edwards' very low debt-to-equity ratio of 0.13 indicates that the company has been very successful at debt management, while a quick ratio of 2.03 demonstrates the ability to cover short-term liquidity needs. An additional sign of strength for the company is its expanding return on equity, which increased from 12.60% to 18.15% over the past year.
Management considered Edwards' first quarter results strong, and announced that it expects second quarter diluted EPS in the range of 73 cents to 77 cents per share. The company increased its full-year EPS estimate by two cents to a range of $2.95 to $3.03 per share. Any company may harbor some minor weaknesses, but we do not currently see any in Edwards Lifesciences that are likely to significantly impact future results.
( 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.
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 earnings per share (EPS), which improved from $0.08 to $0.16 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.
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.