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. Classes are offered at a number of locations, as well as through DeVry University Online.
The company has been rated a buy since January 2007. DeVry's strengths include impressive earnings-per-share growth, compelling improvement in net income, revenue growth and a solid financial position. For the third quarter of fiscal 2008, DeVry reported EPS of 53 cents, vs. 32 cents a year ago. 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 $38.3 million represents an increase of 67% year over year. DeVry also has no debt to speak of, and its revenue rose by 18% in the second quarter.
The company also disclosed on May 19th 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. 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 results in net sales and net earnings for the first quarter of fiscal 2008. Balchem achieved net sales of $56.9 million, reflecting a 35% increase from the year-ago quarter. Net earnings increased 35% year over year to $4.6 million. As a result, the company's earnings per share climbed 32% to 25 cents from 19 cents.
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.
is one of the nation's oldest providers of radioactive, hazardous and industrial waste management services. The company's customers are commercial and government entities such as nuclear power plants, medical and academic institutions, steel mills, refineries and chemical production facilities. A significant portion of revenue from operating disposal facilities -- those that actively receive and treat waste materials -- comes from discrete, one-time clean-up projects that may span weeks, months, or years. American Ecology's Non-Operating Disposal Facilities segment consists of facilities that no longer receive waste materials but continue to be monitored and maintained as part of the treatment of previously received waste materials. Other services include such services as waste stabilization, encapsulation, and chemical oxidation.
We have rated American Ecology a buy since October 2005. Strengths such as revenue growth, a largely solid financial position and notable return on equity influenced this rating. For the first quarter of fiscal 2008, American Ecology's revenues rose 19% year over year. This growth appears to have trickled down to the bottom line, improving EPS by 19%. In fact, the company has demonstrated a pattern of positive EPS growth over the past two years. A slight improvement in return on equity can be seen as a modest strength for the company. Finally, while total debt increased slightly year over year, it remains at an almost negligible level.
Looking ahead, the company anticipates fiscal 2008 earnings to be in the range of $1.17 to $1.23 a share. This estimate is based on the company's record first quarter results and its strong outlook for the second quarter. Additionally, we feel that American Ecology's strengths outweigh the fact that the company currently shows weak operating cash flow.
( 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. Strengths include revenue growth, solid stock performance and an increase in net income. For the first quarter of fiscal 2008, the company reported that its net income rose 21% year over year to $465 million, while its revenue climbed 43%. This growth appears to have trickled down to the company's bottom line, as EPS improved to 92 cents from 82 cents a year ago. Finally, net operating cash flow increased 12% to $957 million.
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 past year has placed it at a premium compared to some of its peers, we feel the price levels are justified by other strengths. Bear in mind, however, that XTO operates in an industry that is highly volatile, and the cyclical nature of oil and gas prices could impact future results.
combines one of the nation's leading pharmaceutical services companies with the country's largest pharmacy chain. Filling or managing more than one billion prescriptions a year, the company operates approximately 6,200 retail pharmacy stores across 38 states through its CVS/pharmacy segment, while Caremark Pharmacy Services provides comprehensive prescription benefit management services to more than 2,000 health plans, including corporations, managed care organizations, insurance companies, unions and government entities. The company believes that the 2007 merger between CVS Corporation and Caremark Rx enables it to deliver substantial benefits to shareholders, customers, and employers, offering end-to-end services, from plan design to prescription fulfillment, as well as the opportunity to improve clinical outcomes.
We have rated CVS Caremark a buy since March 2004. Strengths can be seen in its robust revenue growth, solid stock price performance, growth in earnings per share and compelling improvement in net income. For the first quarter of fiscal 2008, the company reported year-over-year revenue growth of 62%. This appears to have trickled down to the company's bottom line, improving EPS by 19%. CVS Caremark has demonstrated a pattern of positive EPS growth over the past two years. In addition, net income increased 83% for the first quarter. Finally, the stock price has risen over the past year, reflecting the company's earnings growth and other aforementioned positive factors.
Management was pleased to announce record first quarter results, with strong revenue and margin growth contributing to the solid earnings results, which were at the high end of the company's expectations. CVS opened 41 new retail stores during the quarter and made substantial progress on its new PBM/retail model. We feel that the company's strengths outweigh the fact that it shows low profit margins.
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.