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 more than $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 had a buy rating since June 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 net income increases resulting from margin expansion and higher income from continued operations (which were partially offset by higher interest expense and taxes).
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 concerns.
mines, smelts and refines copper in southern Peru. It has earned a buy rating since May 2005. The company has shown a low debt-to-equity ratio, strong EPS growth, impressive stock price appreciation and significantly increased return on equity that has outperformed the
and exceeded that of the metals and mining industry average.
While the company may harbor a few minor weaknesses, they are unlikely to have a significant impact on results.
makes navigation, communications and information devices based on GPS technology. The company has been rated a buy since May 2005. Garmin has shown stellar revenue growth, notable return on equity, a two-year pattern of steady EPS growth, and is carrying no debt.
Though no company is perfect, we do not currently see any weaknesses that are likely to detract from the generally rosy outlook.
Rated a buy since April 2005,
designs, manufactures and distributes light-, medium- and heavy-duty trucks and parts.
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 hurt by higher-cost 2007 emission engines.
has been rated a buy since March 2006. The company's strong revenue growth resulted from the acquisition of BellSouth and record new subscribers during its first quarter of 2007. Growth in the wireless business helped offset the losses suffered in the traditional wireline segment. Once the BellSouth merger is completed, AT&T expects higher free cash flow and merger synergies.
Stiff competition from wireline and cable operators, merger-related challenges and a decline in return on equity could restrict the company's growth prospects.