Each business day, 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 -- and publishes these lists in the Ratings section of our Web site.
This list is based on data from the close of the previous trading session. Today, fast-growth stocks are in the spotlight. These are stocks of companies that are projected to increase revenue and profit by at least 12% in the coming year and rank near the top all stocks rated by our proprietary quantitative model, which looks at over 62 factors.
In addition, the stocks must be followed by at least one financial analyst who posts estimates on the Institutional Brokers' Estimate System. Please note that definitions of revenue vary by industry, and this screen does not make adjustments for acquisitions, which can materially affect posted results. Likewise, earnings-per-share growth may be affected by accounting charges, share repurchases and other one-time items.
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.
, an offshore oil driller, has been rated a buy since November 2005 on the basis of its record quarterly performance that benefited from favorable market conditions, heightening drilling activities worldwide and its return on equity, which has consistently improved over the last three years.
Third-quarter revenue climbed 40.8% on the year to $791.28 million, while net income increased 53.6% to $318.28 million, further supported by operating-margin expansion. There has been heightened drilling and exploration activity recently, following the growing demand for oil and gas because of improving standards of life as well as an increase in automobile usage.
The stock is not risk-free. Noble's performance is dependent on the number of operational rigs in the market, determined by the quantum of drilling activities, which are cyclical in nature. In addition, oil and gas prices are highly volatile, as well as cyclical, and are currently at an all-time high level.
Cam Commerce Solutions
, which engages in the design, development, marketing, installation and servicing of integrated retailing and payment processing for brick-and-mortar and e-commerce businesses, has been rated a buy since December 2005. The company has demonstrated a pattern of positive EPS growth over the past two years, and this trend is expected to continue. Its third-quarter revenue grew by 25.5% when compared with the same period last year, outpacing the industry average.
Powered by its strong earnings growth and other important driving factors, this stock has gone up 62.69% in the 12 months prior to Dec. 14. While any stock can fall in a major bear market, in almost any other environment, this stock should continue to move higher. Although the company may harbor some minor weaknesses, they are unlikely to have a significant impact on results.
manufactures and distributes industrial packaging products through three segments: industrial packaging and services; paper, packaging and services; and timber. It has been rated a buy since December 2005. The company maintains a largely solid financial position with reasonable debt levels, robust revenue and EPS growth, and a solid stock price performance. These strengths outweigh the company's low profit margins.
Fiscal-year fourth-quarter revenue climbed 19.9% over a year ago, outpacing the industry average of 14.3%. EPS increased 30.3% over the same period, to $1.16 per share in the fourth quarter compared with 89 cents a share in the same period last year. Greif has demonstrated a pattern of positive EPS growth over the past two years, and this trend is expected to continue. In addition, its debt-to-equity ratio of 0.68 is less than that of the industry average, implying that there has been relatively successful management of debt levels.
Air Products and Chemicals
, a chemical and gas producer, has been rated a buy since December 2005 on the basis of its strong revenue growth, expanding margins and increased net income, coupled with a notable return on equity. Higher pricing and volumes across various business segments have supported the revenue growth.
Fiscal-year fourth-quarter profit increased 128% over a year ago, led by higher net sales, to $292.80 million. Sales climbed by 10.3% to $2.60 billion during the same timeframe, due to higher pricing and volumes in the merchant gases segment and higher volumes in its tonnage gases and electronics and performance materials segment.
The company plans to expand margins and to continue to reduce costs across all of its businesses, with the goal of achieving an improvement of 100 basis points in fiscal 2008.
Risks to Greif's performance include high competition from several large, global competitors. In addition, unfavorable effects of currency fluctuations may adversely affect the company's top line.
Mobile TeleSystems OJSC
, a mobile-phone operator, has been rated a buy since September 2005. The Russian company has experienced solid growth in revenue and net income, a strong cash level and attractive return on equity.
Third-quarter profit increased 34.6% to $654.7 million, or 33 cents a share. Revenue grew 23.3% to $2.22 billion. Total consolidated subscribers rose 15.4% to 77.97 million from 67.59 million. In September, the company announced the acquisition of an 80% stake in International Cell Holding, which is a 100% indirect owner of K-Telecom CJSC, Armenia's largest mobile-phone operator. This should help open growth opportunities in the fast-growing Commonwealth of Independent States.
However, the company faces stiff competition, as evidenced by its declining average monthly service revenue per subscriber, particularly in the Ukraine. Additionally, lower revenue from its handsets and accessories segment could restrict its growth potential.
This article was written by a staff member of TheStreet.com Ratings.