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.
Top Fast-Growth Stocks
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Mobile TeleSystems OJSC
, a mobile-phone operator, has been rated 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. However, the company faces increased competition and declining revenue in the handset and accessories segment.
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.
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 to $882.3 million, outpacing the industry average of 14.3%. EPS for the quarter increased 30.3% over a year ago. 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.
, which makes excavation equipment, has been rated a buy since July 2006. The company maintains a largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and growth in EPS, revenue and net income. These strengths are expected to outweigh the company's somewhat disappointing return on equity.
Third-quarter net income totaled $28.6 million, or 77 cents a share, up from $16.7 million, or 53 cents a share a year ago. Bucyrus has demonstrated a pattern of positive EPS growth over the past two years, and this trend is expected to continue. Revenue leaped by 170.4%, outstripping the industry average of 8%.
The machinery industry overall is poised to continue the growth it has exhibited over the past few years, growth that has outpaced that of the overall economy. The challenges the industry faces include the recent surge in commodity costs, which has lowered margins on many goods.
manufactures and markets cranes and related products, food service equipment and marine products. It has been rated a buy since November 2005. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of EPS growth, compelling growth in net income, notable return on equity and solid stock price performance. These strengths should outweigh the fact that the company's profit margins are low.
Third-quarter earnings increased 51% on the year to $75.9 million, or 59 cents a share, and revenue climbed 29% to $1.01 billion. Manitowoc raised its guidance for full-year 2007 earnings to $2.55 to $2.60 a share, up from an earlier forecast of $2.45 to $2.50 a share. This stock has surged over the past year and while it is now somewhat expensive compared to the rest of its industry, Manitowoc's other strengths justify the higher price levels.
, which distributes industrial, medical and specialty gases, and welding, safety and related products, has been rated a buy since December 2005. The company's strengths can be seen in several areas, such as its robust revenue growth, reasonable valuation levels, solid stock price performance, impressive record in EPS growth and net income. These strengths outweigh the fact that the company has had generally poor debt management on most measures evaluated by TheStreet.com Ratings.
Fiscal-year second-quarter profit increased 28% to $50.6 million, or 60 cents a share. Airgas said it expects in its third fiscal quarter earnings to rise. The company has demonstrated a pattern of EPS growth over the past two years and TheStreet.com Ratings feels that this trend should continue. The company's stock has risen sharply over the past year, and it should continue to move higher
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.