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 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.
markets casual apparel such as denim, sportswear, outerwear, accessories and footwear under the brand names Buckle and The Buckle. It has been rated a buy since May 2003 primarily due to its solid financial position and growth in revenue, net income and EPS.
In the second quarter of fiscal 2008, the company's revenues rose 36.6% year over year. The company improved its EPS from 38 cents per share to 78 cents per share over the same period. Net income also increased by 88.9%, rising from $11.79 million in the second quarter of fiscal 2007 to $22.28 million in the most recent quarter. The Buckle reported a gross profit margin of 44.50%, which also increased from the same quarter one year prior. Additionally, the company is clearly able to cover its short-term cash needs as it has no debt to speak of, as indicated by a quick ratio of 2.50 and a debt-to-equity ratio of zero. Finally, on Sept. 16, the company announced that at its quarterly meeting the Board of Directors authorized a special one-time cash dividend of $3 per share, along with a 30-cent-per-share quarterly dividend. A 3-for-2 stock split was also authorized at that time.
While no company is perfect, we currently do not see any significant weaknesses which are likely to detract from this company's generally positive outlook. It is important to bear in mind, however, that the specialty retail industry as a whole could face pressures from a continued housing market contraction or a slowing economy. Such events could lead to a more challenging business environment that could potentially affect The Buckle's results and therefore the buy rating.
offers personnel radiation monitoring to measure the dosages of x-rays, gamma radiation and other penetrating ionizing radiation to which a person has been exposed. Our buy rating for Landauer has not changed since November 2001, supported by the company's revenue growth, largely solid financial position, and increases in net income and EPS.
For the third quarter of fiscal 2008, Landauer reported that its revenue rose 6.4% year over year. This appears to have helped boost EPS, which improved by 47.6% when compared to the same quarter a year ago. Net income also increased for the third quarter, rising 48.3% from $3.91 million to $5.79 million. Landauer has no debt to speak of, and with a quick ratio of 1.69 should be able to cover its short-term liquidity needs. Additionally, Landauer also increased its net operating cash flow slightly by 5.24% when compared with the same quarter last year.
Management announced that it was pleased with the revenue and earnings growth during the third quarter and expressed confidence in the company's ability to continue generating strong cash flow. Landauer now anticipates full-year fiscal 2008 results at the upper end of previously announced ranges of 4%-to-5% growth in revenue and 6%-to-8% growth in net income.
Church & Dwight
develops, manufactures, and markets household, personal care and specialty products under well-recognized brand names such as Arm & Hammer, Brillo, Kaboom, OxiClean and Trojan. We have rated Church & Dwight a buy since November 2001, supported by the company's impressive revenue growth, healthy liquidity position, increased net income, and key strategic initiatives. The company's strengths also include its higher returns, improved leverage levels and favorable business outlook.
For the second quarter of fiscal 2008, Church & Dwight reported revenue growth of 8.7% year-over-year, led by organic growth and favorable currency exchange. Net income rose from $40.53 million in the second quarter of fiscal 2007 to $45.77 million in the most recent period, while EPS improved from 59 cents to 66 cents over the same period. The company's equity increased 23.3% to $1.20 million, while its debt dropped 15.4% to $7.4 billion. Returns on assets and equity improved 102 and 21 basis points, respectively.
Church & Dwight recently acquired Coty Incorporated's over-the-counter business Del Pharmaceuticals. In addition, the company plans to set up its laundry plant and distribution center in Pennsylvania. Looking forward to full-year fiscal 2008, the company raised its EPS guidance to a range of $2.83 and $2.85 and forecast organic revenue growth beyond 3% to 4%. Bear in mind, however, that failure to achieve revenue from new products and increased prices may pose a threat to Church & Dwight's future financial performance. In addition, a decrease in demand for the company's products due to the slowdown in the U.S. economy could negatively impact revenue growth.
is a global healthcare supplier that manufactures over-the-counter pharmaceutical and nutritional products for the store brand market. We have rated Perrigo a buy since March 2007 due to a variety of strengths.
For the fourth quarter of fiscal 2008, the company reported that its revenue rose 32.3% year over year. This growth appears to have trickled down to the company's bottom line, boosting EPS from 20 cents in the fourth quarter of fiscal 2007 to 30 cents in the most recent quarter. Net income also increased, rising 46.5% when compared to the same quarter last year. In addition, Perrigo increased its net operating cash flow by 106% year over year.
Management was pleased to announce that its team's efforts resulted in fiscal 2008's sales and earnings results being the best in the company's 120 year history. The company intends to grow its business while maintaining a focus on quality in 2009. Additionally, Perrigo announce on October 6 that has acquired the Mexican company Laboratorios Diba, which manufactures store brand over-the-counter and prescription pharmaceuticals. According to management, the acquisition could add nearly $15 million in annual sales, as well as allowing Perrigo to expand the number of formulas and trademarks that it markets in Mexico. While Perrigo may harbor some minor weaknesses, we do not see these as having any significant impact on its future financial results.
provides consulting services to organizations confronting legal, financial, and reputational issues. FTI Consulting has been rated a buy since May 2004. Our recommendation is based on the company's strong revenue growth, expanding operating margin, and increasing bottom-line. The company's solid cash position and notable returns also strengthen its position.
For the second quarter of fiscal 2008, FTI reported that its revenue grew 40.9% year-over-year, driven by strong segmental performance. EPS also improved, rising from 53 cents in the second quarter of fiscal 2007 to 66 cents in the most recent quarter. The company's cash position improved during the quarter, as reflected by a $30.26 million surge in cash and cash equivalents. Return on assets and return on equity also expanded, improving 220 and 185 basis points, respectively. Operating margin improved 169 basis points when compared to the same quarter a year ago, rising to 19.92%. In addition, the company recently completed the acquisition of Attenex Corporation and Kinesis Marketing.
Looking forward, the company reaffirmed its full fiscal year EPS guidance for a range of $2.50 to $2.63 per share on revenue of $1.30 billion to $1.38 billion. However, the company's deteriorating gross profit margin, failure to retain and hire qualified professionals, and lower merger and acquisition activities are potential risks to consider. These challenges, along with the unfavorable change in economic conditions, could restrict future profitability.
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 a rating alone cannot tell the whole story and should be part of an investor's overall research.
This article was written by a staff member of TheStreet.com Ratings.