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, large-cap stocks are in the spotlight. These are stocks of companies with market capitalizations of over $10 billion that 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 leads off with
, a manufacturer of complex metal components and products for the aerospace and industrial gas turbine industries. It has been rated a buy since March 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 strong cash flow that has enabled it to repay debt while maintaining its dividend payout.
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 of concern.
Insurance and financial services company
has merited a buy rating since March 2005. With a strong market position and favorable industry trends, the company is positioned for continued strong financial performance.
MetLife has bolstered its market position in the core insurance and annuity business with its acquisition of Travelers Insurance Company and the completion of a distribution agreement with
in 2005, giving it one of the broadest distribution networks in the sector. Ongoing consolidation within the industry will lead to sustained growth.
As with other insurance and financial services companies, risks include any sharp fluctuation in equity markets, a decline in investment spreads, negative competitive effects on premium rates, adverse regulatory developments and any unexpected catastrophic event.
Rated a buy since April 2005,
operates its eponymous hamburger restaurants around the world. The company is in the middle of a plan to pare down company-owned restaurants and rebuild the brand as a 24-hour destination. (More than 40% of its restaurants are open around the clock, compared with less than 1% five years ago.) McDonalds is converting about 2,300 of its restaurants to developmental licensees -- a strategy that avoids all of the cost of real estate ownership and thus improves margins.
The company demonstrates strong revenue growth, increased income from continuing operations and improved sales due to strong U.S. demands and an improved performance in international markets.
With operations in more than 118 countries, risks include cultural, economic and regulatory challenges. Its growth also depends on the successful opening of its restaurants, the roll-out of new products, improvement of existing products and product-line extensions.
A buy since May 2005,
develops, manufactures and distributes products and services used by the health care industry. The company has shown strong revenue growth (particularly in its bioscience product line), strong bottom-line growth with improved profit margins, and a promising outlook for EPS growth going forward.
Risks to the buy rating include any delays in the regulatory approval process, ambivalent market acceptance of its products or pricing pressure from generic competitors.
designs, manufactures and distributes light-, medium- and heavy-duty trucks and parts. It has been rated a buy since April 2005.
The company's expansion plans, superior product lines and international focus should preserve its track record of delivering strong financial performance and returns to the shareholders. In April, Paccar opened a new office in Shanghai to focus on sourcing parts for worldwide manufacturing and aftermarket sales. It demonstrates revenue growth and record net profit due to margin expansion.
Paccar has a few potential risks. It is reducing production at its facilities in North America because of lower industry demand, which it believes has been negatively affected by higher-cost 2007 emission engines.