Updated from 9:06 a.m. EDT
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 top-line growth throughout fiscal 2007.
The company reported robust results for 2007 on Jan. 17th. Assets under management were up 21% compared to the end of 2006, standing at $1.36 billion. 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 strict risk-management procedures to mitigate damage stemming from current turmoil in the credit markets. Management feels that this focus will enable it 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 U.S. economy and fluctuations in interest rates could adversely affect the company's performance.
( AXYS) designs and manufactures precision optical solutions for use by the U.S. government and high-performance commercial markets in aerospace, defense and other applications. Axsys also distributes precision ball bearings used in a variety of industrial and commercial applications.
In the fourth quarter of 2007, the company recorded strong financial performance. Strong demand for both Axsys' traditional business and the recently acquired gyro-stabilized gimbal business helped generate revenues of $47.9 million, vs. $33.8 million in the fourth quarter of 2006. Sales increased 42% year over year to a record $47.9 million. The company reports that its backlog increased to a record $140 million, which is a 21% increase over the fourth quarter of 2006. This increase was due to strong demand for infrared cameras and lenses, gimbal systems and military-grade motion control systems.
Looking ahead for full-year 2008, management now expects to generate sales in the range of $208 million to $212 million, up from the previously forecast $193 million to $197 million. Management also expects diluted earnings per share between $1.70 and $1.75, up from the previous guidance of $1.57 to $1.60. However, any significant reduction or delay in purchase of the company's products by the U.S. government could adversely impact Axsys' financial performance, as the company derives a significant portion of its revenue from this source.
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% for the fourth quarter of 2007 to $121.6 million, up from $81.8 million a year ago.
Atwood's debt-to-equity ratio is very low at 0.03, implying successful management of debt levels. During the past fiscal year, the company increased full-year EPS to $4.37 from $2.75 in the prior year. The company has demonstrated a pattern of positive earnings 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 its 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.
is a provider of salvage vehicle auction services. The company began as a single facility in Vallejo, Calif., in 1982 and has since grown to an integrated network of approximately 135 facilities in Canada, the U.K. and the U.S.
As an online remarketer, Copart sells more than 1 million vehicles a year to buyers who include licensed dismantlers, rebuilders, used vehicle dealers and exporters. Most of the remarketed vehicles are damaged vehicles that are deemed total losses for insurance or business purposes, or stolen vehicles that have been recovered after an insurance settlement has already been made to the owner. Copart's revenues come primarily from sales fees paid by vehicle owners and buyers. Fees for services such as towing and storage also generate revenue for the company.
Copart has been rated a buy since November 2004. For the first quarter of 2008, revenues rose 39% year over year. Net income increased 24% to $37.6 million in the same period. The company has no debt to speak of and has improved its EPS by 28% in the first quarter from the same quarter one year ago. Finally, while Copart's gross profit margin is rather high at 50%, the figure has decreased in the past year.
Copart calls itself "change-centric," striving to continually improve its services to meet the needs of both buyers and sellers. Although the company may harbor some minor weaknesses, we feel that its strengths should help the performance of this stock.
provides rendering, recycling and recovery solutions to the food industry, processing animal byproducts and used cooking oil into meat and bone meal, tallow and yellow grease. The company also provides grease-trap cleaning services to food service establishments. Darling operates 24 facilities throughout the U.S., as well as a fleet of nearly 640 trucks and tractor-trailers to collect raw materials. The company markets its finished products worldwide to producers of oleo-chemicals, soaps, pet foods and livestock feed.
We have rated Darling a buy since January 2007. The company reported on Feb. 27 that its earnings for the fourth quarter of 2007 more than doubled, driven by higher prices for finished product. Net income surged to $14.4 million, or 18 cents a share, from $6.1 million, 07 cents a share, one year prior. Net sales increased 37% year over year. Sales growth is attributed to higher finished product prices and the inclusion of the full-year operations resulting from the company's acquisition of National By-Products in May 2006.
Looking ahead, the management believes it has significant momentum moving into 2008, but does expect prices for natural gas and diesel fuel to remain volatile in fiscal year 2008. Additional regulations on the use of feed by the Food and Drug Administration could adversely affect the company.
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.
Know What You Own:
Atwood Oceanics operates in the oil and gas drilling industry, and some of the other stocks in its field include
Diamond Offshore Drilling
. These stocks were recently trading at ($120.93, -2.83%), ($31.69, -1.37%) and ($134.50, -2.22%) respectively. For more on the value of knowing what you own, visit TheStreet.com's
This article was written by a staff member of TheStreet.com Ratings.