Each weekday, 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, updated daily, 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 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.
Today starts off with
Precision Castparts Corp.
, which makes complex metal components and products for the aerospace and industrial gas turbine industries. It has been rated buy since June 2005.
The company has completed recent acquisitions to expand its casting, forging and fastener product offerings, and that should fuel revenue growth. Precision also shows net income increases resulting from margin expansion and higher income from continued operations (which were partially offset by higher interest expense and taxes).
Since Precision depends on the aerospace industry for its top-line growth, any slowdown in that industry could lead to reduced demand for its products. Any fluctuations in the prices of basic materials or any unseen difficulty in integrating recent acquisitions could also be concerns.
Russian dairy product and beverage manufacturer
( WBD) has earned a buy rating since December 2005. The company has shown impressive revenue growth, net income increases and significant growth in return on equity.
Its return on equity in the last quarter exceeded that of the same quarter one year ago, a clear sign of strength within the company. These strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared with earnings and book value.
( SII), which provides products and services for oil and gas exploration and production, has had a buy rating since May 2006. The company reported impressive financial results for the first quarter of the year: Revenue increased 25.3%, and net income shot up almost 50% compared with the same period the previous year.
Smith's performance depends on the level of oil and natural gas exploration and development activities, which are cyclical in nature. There has been a rise in oil price in the past two years, which might lead to either a decline in demand or increased use of alternatives, which may ultimately result in the lowering of demand for oil.
Rated a buy since May 2006,
manufactures and markets cranes and related products, food service equipment and marine products. The company demonstrates notable revenue growth, significant EPS improvement, impressive stock price appreciation and net income growth that has significantly outpaced that of the
and its industry.
Its price level is now somewhat expensive compared with the rest of its industry, but given its strengths, the higher price is justified. Manitowoc's low profit margins are not a threat to its buy rating at this time.
( HEI-A) makes aerospace and electronics products.The company has been rated buy since May 2005. The company has reported robust revenue growth and has a largely solid financial position with reasonable debt levels by most measures, an impressive record of earnings-per-share growth, good cash flow from operations and solid stock price performance.
The company has demonstrated a pattern of positive EPS growth over the past two years. Revenue growth came in higher than the industry average of 6.3%. The stock's sharp appreciation over the last year has driven it to a price level that is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.