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 60 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.
is an international higher education company that operates DeVry University, Ross University, Chamberlin College of Nursing and Becker Professional Review. DeVry University offers career-oriented undergraduate and graduate programs in technology, business and management.
Classes are offered at a number of locations, as well as through DeVry University Online. Ross University is one of the largest medical and veterinary schools in the world. The basic curriculum is taught at campuses in Dominica and St. Kitts/Nevis, while clinical rotations are carried out at teaching hospitals and veterinary schools throughout the United States. Chamberlin College of Nursing, previously known as Deaconess College of Nursing, is a national nursing school, while Becker Professional Review provides professional education to clients in accounting and finance-related professions.
The company has been rated a buy since January 2007. DeVry's strength's can be seen in a variety of areas, such as its impressive record of earnings-per-share (EPS) growth, compelling growth in net income, revenue growth and largely solid financial position. For the third quarter of fiscal 2008, DeVry reported EPS of 53 cents, compared to 32 cents one year prior. This increase continues the company's demonstrated pattern of EPS growth over the past two years, a trend that we feel should continue. The company's third-quarter net income of $38.32 million represents an increase of 67.2% when compared to the same quarter last year. DeVry also has no debt to speak of, and its revenue rose by 18.4% in the second quarter.
In other developments, the company disclosed on May 19 that federal investigators have launched an investigation into the company's recruitment practices, and that management is cooperating fully with this probe. While we believe the stock is a strong one based on its quantitative merits, this is a situation that bears watching.
develops, manufactures and markets specialty performance ingredients and products for the food, feed and mechanical sterilization industries. Balchem produces choline products for both human and animal consumption. Choline, a vitamin-B complex, plays a vital role in the metabolism of fat and the building and maintaining of cell structures. Choline deficiency can result in reduced growth and perosis (a disease characterized by a deformity of the leg joint) in poultry and fatty liver, kidney necrosis and general poor health in swine, among other symptoms. In humans, choline is recognized as playing a key role in the structural integrity of cell membranes, the processing of dietary fat, reproductive development and neural functions such as memory and muscle function.
Balchem also produces encapsulated performance ingredients for use throughout the food and animal-health industries in end products such as baked goods, refrigerated and frozen dough, processed meats, seasoning blends and confections. These performance ingredients are used to enhance nutritional fortification and improve shelf life of prepared products.
Our buy rating for Balchem has not changed since June 2003. The company reported record quarterly results in net sales and net earnings for the first quarter of fiscal 2008. Balchem achieved net sales of $56.9 million, reflecting a 34.9% increase compared to the same quarter one year prior. Net earnings increased 34.9% year over year to $4.6 million. As a result, the company's net earnings per diluted common share increased 31.6% to 25 cents per share from $0.19 per share in the first quarter of 2007.
Management reported that the integration of several acquisitions made during fiscal 2007 have gone well, and stated that the first quarter results did not yet reflect the company's full expectations for those acquisitions. Additionally, management noted again that rising raw material costs are expected to remain a challenge for Balchem in the near term. While the company has taken pricing steps to counteract the effects of these increased input costs, the actions taken in the first quarter did not offset all the cost increases, primarily due to timing. Overall, management expects the remainder of fiscal 2008 to continue to bring double digit increases in sales and earnings. Bear in mind, however, that global economic issues could affect the company's results.
engages in the development, manufacture and sale of precision-engineered flow equipments through three divisions: Flowserve Pump, Flow Control, and Flow Solutions. The company operates worldwide in more than 56 countries, with 43% of its revenues coming from North America.
We have rated Flowserve a buy since January 2007 based on several positive investment measures, such as the company's increasing revenue and net income. Additionally, the company reported record results in various areas including earnings per share, sales, and bookings for the first quarter of fiscal 2008. Flowserve's revenues rose 23.6% year over year in the first quarter, largely due to strong sales in the oil and gas markets. The company also reported that fully diluted earnings per share improved 159.0%, rising from 59 cents a year ago to $1.53. Furthermore, net income increased 162.0%, rising from $33.61 million to $88.07 million. Additionally, bookings were up 31.0% for the quarter.
Management raised its fiscal 2008 EPS forecast to a target range of $5.90 to $6.20 from its previous estimate of $5.10 to $5.40. The company is encouraged by its first-quarter results and its continued strength in key markets, and remains confident in its ability to successfully carry out its operational excellence initiatives to increase its performance in the current global environment. Bear in mind, however, that the recent surge in commodity costs is a challenge to the machinery industry as a whole and could therefore affect Flowserve's results in the future.
is a whole and retail seller of industrial and construction supplies. Founded in 1967, Fastenal currently operates over 2,160 stores in the U.S., Canada, Mexico, the Dominican Republic, Puerto Rico, Singapore, China and Europe. The company sells approximately 580,000 different types of industrial and construction supplies in ten product categories. These include threaded fasteners and miscellaneous supplies, tools, metal cutting tool blades, fluid transfer components and accessories for hydraulic and pneumatic power, material handling and storage products, janitorial and paper products, electrical supplies, welding supplies, safety supplies and raw materials (metals).
Fastenal has been rated a buy since May 2003. This rating is supported by the company's strong revenue growth, higher unit sales, expanding profit margin, solid net income, notable return on equity, and healthy liquidity position. Fastenal reported revenue growth of 15.8% year over year for the first quarter of fiscal 2008. The company's sales were boosted by an increase in the number of store openings. Fastenal's focus on freight initiatives and improvements in direct sourcing operations boosted its margins during the quarter. Net income rose 26.0% to $68.09 million, or 46 cents per share. Return on equity jumped 193 basis points to 23.71%.
Rising fuel costs negatively impacted Fastenal's financial performance during the first quarter. Any further increase could adversely impact the company's bottom line in the future. Moreover, the slowdown of the U.S. economy may reduce the demand for distribution of industrial and construction supplies, which could lead to a decline in the company's sales growth.
( XTO) acquires, develops, exploits and explores oil and gas properties. The company also produces, processes, markets and transports oil and natural gas. XTO's proved reserves are located primarily in various regions of Alaska, Arkansas, Colorado, Kansas, New Mexico, Oklahoma, Texas and Wyoming. These fields are generally long-lived, with well-established production histories.
We have rated XTO Energy a buy since November 2001. We view the company's revenue growth, stock performance and increase in net income as strengths. For the first quarter of fiscal 2008, the company reported that its net income rose 21.4% to $465 million from $383 million a year ago, while its revenue rose 43.2% year over year. This growth appears to have trickled down to the company's bottom line, as earnings per share improved from 82 cents a year ago to 92 cents. Finally, net operating cash flow increased 12.45% to $957.00 million. Moreover, on June 10, the company disclosed a deal to buy Hunt Petroleum Corp. in a purchase that should boost XTO's oil and gas output by nearly a third.
Management feels that the first-quarter results reflect a strong start to fiscal 2008, which they hope will be another record year for the company. While the stock's sharp appreciation over the last year has made it a premium compared to some of its peers, we feel the price levels are justified by the strengths of the company. Bear in mind, however, that the company operates in an industry that is highly volatile, and the cyclical nature of oil and gas prices could impact XTO's future results.
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 that a rating alone cannot tell the whole story and that it should be part of an investor's overall research.
This article was written by a staff member of TheStreet.com Ratings.