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.
is an international higher education company that operates DeVry University, Ross University, Chamberlin College of Nursing and Becker Professional Review. We've rated it 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, robust revenue growth, return on equity and largely solid financial position. Soild stock price performance also contributes to the buy rating.
The company announced on Jan. 27 that its revenues rose 35% year over year in the second quarter of fiscal 2009, helped by increased revenue across segments and the acquisition of U.S. Education, which is the parent company of Apollo College and Western Career College. Revenue growth appears to have trickled down to the bottom line, as DeVry reported EPS improvement of 20.4%. Higher enrollment numbers also helped boost earnings. Net income also increased, rising to $42.9 million from $35.8 million in the second quarter of fiscal 2008. Return on equity, which improved slightly when compared to the same quarter a year ago, can be seen as a modest strength for the organization. In addition, a debt-to-equity ratio of 0.2 indicates that DeVry has successfully managed its debt levels.
Management was pleased not only with DeVry's financial results in the second quarter, but also with the employment rate of its graduates. Management stated that it was remarkable in the current job market to see 92% of recent graduates employed within six months of graduation. The company continues with a conservative capital structure that it feels is appropriate to the current economic climate, although it does continue to invest in growth opportunities. Looking ahead, DeVry expects its full year 2009 capital expenditure to be in the range of $65.00 million to $70 million. Although the company shows low profit margins, we feel that the strengths detailed above outweigh any weaknesses at this time.
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 and is supported by the company's revenue growth, largely solid financial position, and increases in net income and EPS.
For the fourth quarter of fiscal 2008, Landauer reported that its revenue rose 5.5% year-over-year, outpacing the industry average of 2.7% growth. This appears to have trickled down to the company's bottom line, as Landauer's EPS improved 18% when compared to the same quarter a year ago. Net income also increased for the fourth quarter, rising 18.9% from $4.6 million to $5.5 million. Landauer has no debt to speak of, and a quick ratio of 1.7 should allow the company to cover its short-term liquidity needs. Additionally, a slight improvement in return on equity can be viewed as a modest strength for the company.
Management announced that it was pleased with its results for fiscal 2008, which resulted from the successful execution of Landauer's strategic plan and the cash flow generation capabilities of its financial model. The company is confident about its future growth opportunities. Although the stock is currently trading at a premium based on factors like book value and earnings, we feel that its strengths justify the higher price at this time.
provides technologies and solutions for mission-critical national security programs for the intelligence community, the space community, and various departments and agencies of the U.S. federal government. We've rated it buy since March 2005, based on strengths such as the company's robust revenue growth, largely solid financial position, and record of EPS growth.
For the third quarter of fiscal 2008, revenue rose by 26.8% year over year. This increase was primarily the result of a business strategy focused on high-end defense and intelligence markets supporting U.S. national security. Revenue growth appears to have helped boost earnings per share, which improved 31.4% when compared to the same quarter a year ago. The EPS increase from 51 cents to 67 cents represents the continuation of a pattern of positive EPS growth demonstrated by ManTech over the past two years, a trend which we feel should continue. Net income also increased in the third quarter, rising from $17.5 million in the third quarter of fiscal 2007 to $23.9 million in the most recent quarter. ManTech's very low debt-to-equity ratio of 0.007 and quick ratio of 1.4 illustrate the company's successful management of debt levels and ability to avoid short-term cash problems.
Management announced it was pleased with the third quarter results, as strong performance and excellent cash flow helped provide necessary flexibility in a challenging economic environment. Based on strong business momentum in its national security and defense business, the company set EPS guidance at 67 cents to 70 cents for the fourth quarter and $2.53 to $2.56 for full-year fiscal 2008. These ranges represent 10% to 15% growth over the fourth quarter of fiscal 2007 and 30% to 31% growth over full-year fiscal 2007. The company currently shows low profit margins, but we feel that the strengths detailed above outweigh any potential weakness.
Gentiva Health Services
and its subsidiaries provide home health and related services throughout the U.S. Our buy rating for Gentiva has not changed since November 2005 and is supported by the company's revenue growth, largely solid financial position, and expanding profit margins. Other strengths include a notable return on equity and good cash flow from operations.
For the third quarter of fiscal 2008, the company reported that its revenues rose 12.4% year-over-year. This growth appears to have helped boost EPS, which rose from 28 cents a year ago to $4.07 in the most recent quarter. Gentiva's return on equity improved greatly, rising from 9.5% to 31.1%. The company also has a gross profit margin of 45.1%, which we consider to be strong. In addition, the company's low debt-to-equity ratio of 0.5 implies that it has successfully managed debt levels, while a quick ratio of 1.6 indicates that Gentiva is able to cover its short-term liquidity needs.
Looking ahead, Gentiva adjusted its revenue outlook and raised its earnings outlook for full year fiscal 2008 based on the performance to date of its Home Health segment. The company now expects net revenues ranging between $1.28 billion to $1.3 billion, and anticipates diluted earnings per share to be between $1.47 and $1.51, up from the $1.36 to $1.43 range previously provided. Although no company is perfect, we do not currently see any significant weaknesses which are likely to detract from Gentiva's generally positive outlook.
New Jersey Resources
is an energy services holding company that provides retail and wholesale energy services to customers in New Jersey, other states from the Gulf Coast to New England and Canada. Our rating for New Jersey Resources has been in place since September 2002 and is supported by the company's healthy revenue growth, solid stock price performance, compelling net income growth, and impressive record of EPS growth. For the fourth quarter of fiscal 2008, the company reported revenue growth of 40.1% year over year, which outpaced the industry average of 22.6%. Revenue growth appears to have helped boost EPS, which rose significantly from a loss of 91 cents per share in the fourth quarter of fiscal 2007 to a profit of $1.86 in the most recent quarter. Net income surged 305.1% when compared to the same quarter a year ago. In addition, the company announced that its Board of Directors recently approved a 10.7% dividend increase, bringing the quarterly dividend rate to 31 cents per share. The company has paid quarterly dividends continuously since it began in 1952.
Looking ahead to fiscal 2009, New Jersey Resources forecasts net financial earnings in the range of $2.30 to $2.40 per basic share. Approximately 30% to 40% of those earnings are expected to come from the company's wholesale energy services subsidiary, NJR Energy Services. The company shows low profit margins, but we feel that its strengths outweigh any potential weakness at this time. Strong earnings growth has helped the stock price rise over the past year, and the stock should see more upside potential unless a broad bear market prevails.
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.