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.
, a publicly owned investment manager, has been rated buy since December 2005. Its products include a variety of fixed income, cash management, equity and alternative investment separate accounts and mutual funds.
The company is reaping substantial benefits from its September 2006 merger with Merrill Lynch Investment Managers (MLIM) and the October 2007 acquisition of the fund of funds business of Quellos Group, LLC, which have allowed it to become one of the world's largest asset management firms. The beneficial impact of these business combinations is reflected in the firm's cross-selling successes, which supported its top-line growth throughout fiscal 2007.
The company reported robust results for fiscal 2007 on Jan. 17, with assets under management up 21% compared to the end of 2006, standing at $1.36 billion as of the end of the year. Along with the acquisition of the Quellos business, this helped drive revenue growth of 42% for the quarter and 131% for the year. The firm continues to focus on product diversification and has adopted stricter risk management procedures to mitigate damage stemming from turmoil in the credit markets. Management feels that this focus will enable the company to grow despite current challenging market conditions.
Our rating is subject to the risk of any unexpected downturn in the securities markets or the economy in general, any deterioration in relative investment performance, and any adverse regulatory developments. Furthermore, slowing trends in the US economy and fluctuations in interest rates could adversely affect the company's performance.
provides a variety of software, hardware, and other technical systems for retailers. Our buy rating, in place since February 2006, is based on positive investment measures such as strong revenue growth, solid financial position and stock performance, and growth in net income.
Powered by earnings growth of 70% for the first quarter of 2008, this stock has surged 64% over the past year. Revenues rose 37% year over year. CAM has no debt to speak of, giving it a debt-to-equity ratio of zero, which we consider a favorable sign. Net income increased 75% from the year-ago quarter.
Finally, the company has demonstrated an impressive pattern of positive EPS growth over the past two years. Looking forward, we feel that this trend should continue.
Diamond Offshore Drilling
engages in the contract drilling of oil and gas wells. The company's fleet of 30 submersibles enables it to offer a range of services in various markets worldwide, including the deep water, harsh environment, and conventional semisubmersible markets. Diamond also owns 13 jack-up rigs, which are mobile, self-elevating drilling platforms equipped with legs that are lowered to the ocean floor until a foundation can be built to support the platform. Finally, Diamond also has one drillship, the Ocean Clipper, located off the coast of Brazil.
We have rated Diamond a buy since June 2005. This rating is supported by good top-line performance and superior shareholder returns. Diamond has reported strong revenue growth due to strong demand for rigs across all geographic regions. Revenue increased 15% year over year in the fourth quarter of 2007 to $666.7 million. Over the past three years, Diamond has shown a significant improvement in return on equity due to strong earnings growth. The company reported ROE of 29% as of the end of the fourth quarter. Furthermore, the company has a track record of paying regular cash dividends, as well as a recent special dividend of $1.25 per share.
Diamond is expected to post strong growth in the future, benefitting from new drilling contracts. Recently, the company entered into one new contract and extended three existing deepwater drilling contracts with
, Brazil's state-owned drilling company. In addition, the company received a two-well contract from Callon Petroleum on Nov. 29 for its rig, Ocean Victory. Bear in mind, however, that the slowdown in the U.S. economy and weak job data may put pressure on demand for oil and gas. This could in turn disturb activities related to exploration and production, affecting the number of rigs that are operational in the market and the profitability of the company.
is a Houston-based international drilling contractor, engaging in the offshore drilling and completion of exploratory and developmental oil and gas wells worldwide. The company also provides related support, management, and consulting services.
We have rated this company a buy since September 2004, based on its revenue growth, solid financial position, EPS growth and solid stock performance. Revenue rose 49% year over year for the fourth quarter of 2007 to $121.6 million. Atwood's debt-to-equity ratio is very low at 0.03, implying that the company has been very successful at managing debt levels. During the past fiscal year, the company increased its bottom line by earning EPS of $4.37, vs. $2.75 in the prior year. The company has demonstrated a pattern of positive EPS growth over the past two years. Finally, the stock has surged 72% over the past year, powered by its strong earnings growth of 128%.
Regarding the stock's future course, although almost any stock can fall in a broad market decline, Atwood should continue to move higher despite the fact that it has already seen a substantial gain in the past year. Risks to the rating include any pricing fluctuations in the oil and gas industry, the company's ability to secure adequate financing, and governmental regulation and environmental matters.
provides home health and hospice services in the southern and southeastern United States. The company provides a wide variety of health care services, including skilled monitoring by registered nurses, occupational and physical therapy, assessments, and patient education.
Based primarily on a robust top-line performance and expansions to both margins and the bottom line, we have rated Amedisys a buy since January 2005. Amedisys also has a strong liquidity level and low leverage. For the fourth quarter of 2007, the company's net income grew 47% year over year, driven by strong growth in revenue. Net income stood at $$16.7 million, or 63 cents a share, vs. $11.4 million, or 48 cents a share, a year ago.
Amedisys has a strong outlook thanks to recent acquisitions. During the quarter ended December 2007, the company purchased a home health agency in Carolina, Puerto Rico and six home health agencies located in Georgia and South Carolina. In addition, in February 2008 Amedisys agreed to acquire TLC Health Care Services for $395 million in cash. After this acquisition, the company will have 480 agencies in 35 states. The company also agreed to acquire a holding company that operates Family Home Health Care and Comprehensive Home Health Care Services. Bear in mind, however, that the company's revenue and earnings could be affected by any adverse changes in Medicare rates and reimbursement methodologies or any challenges related to the integrations of the recent acquisitions.
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.