Each week, 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, last updated Nov. 30, 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 62 factors.
Top 5 All-Around Value Stocks
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In addition, the stocks must be followed by at least one financial analyst who posts estimates on the Institutional Brokers' Estimate System. The stocks 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.
produces electricity using natural gas, wind, nuclear, oil, hydro and other resources. It has been rated a buy since September 2005. The company has been expanding its energy infrastructure, diversifying its fuel mix from natural gas towards wind and nuclear power based on growing concern about greenhouse emission and escalating commodity prices.
Management projects earnings to be near the higher range of $3.35 to $3.45 per share for fiscal 2007, up from $3.23 a share in fiscal 2006. In addition, it has raised its earnings projection for fiscal 2008 by 10 cents a share to $3.70 to $3.90 per share.
FPL is exposed to risks arising from the reliability of its power plants as well as transmission and distribution equipments, along with health and safety hazards regarding nuclear plants. The company could also be affected by regulatory changes, higher fuel prices and weather fluctuations.
L-3 Communications Holdings
, a military-equipment company, has been rated a buy since November 2005.
Third-quarter net income rose 21% over a year ago to $199 million. Revenue increased by 11.1% to $3.45 billion during the same period, outpacing the industry average of 8.5%. L-3's earnings per share grew by 19.1% to $1.56, and the company's stable EPS growth over the past year indicates that it has sound management over its earnings and share float. Its net operating cash flow rose 24.41% to $324.10 million during the third quarter compared with the same period last year.
Encouraged by a strong performance during the first nine months of 2007, a healthy backlog position and a favorable industry outlook, L-3 Communications raised fiscal 2007 guidance to $5.86 to $5.90 a share, up from an earlier range of $5.72 to $5.82 a share. The company also said it expects 2008 earnings to be within the range of Wall Street's expectations. Though the company's stock price has risen in the last 12 months, it should continue to move higher.
Risks include any loss of key contracts, which would have an adverse impact on L-3's revenue. Additionally, the company is highly dependent on government spending, which could impact results if reduced.
has been rated a buy since October 2005. The company's diversified business model and growth initiatives leave it well-positioned to gain from positive trends in the railroad industry. Third-quarter profit climbed 27% over a year ago to $532 million, or $2 a share. Revenue climbed 5% to $4.19 billion.
Union Pacific has a diversified business model and serves a broad range of customers, putting the company in a strong competitive position and making it less vulnerable to softness in the housing and auto industries. Tightness in trucking capacity due to shortage of drivers, increased highway congestion and higher fuel prices have resulted in higher demand for rail transport recently. Also, with double-stacked railcars and computer-guided systems, railroads are becoming more competitive than trucks.
On the down side, severe weather, currency volatility and higher-than-expected fuel prices could hurt Union Pacific's financial performance, and a recent change in Illinois tax law could increase the company's future income tax liability.
, an integrated energy company, has been rated a buy since September 2005. Its merchant nuclear electricity business has been contributing significantly to its growth, a trend that should continue, considering that energy prices are rising and power generation is expected to grow. Entergy recently increased its quarterly dividend by 38.9% to 75 cents per share, representing an annualized rate of $3.00 a share. This translates into an attractive dividend yield at its current price level.
which makes motion and control technologies and systems, has been rated a buy since October 2006. Its fiscal first-quarter net income increased 9% from a year ago to $229.60 million, or $1.33 a share, bolstered by strong sales growth in its industrial, international and aerospace segments. Revenue increased by 9.2% to $2.79 billion over the same time frame, driven by a mix of organic growth, strategic acquisitions and positive foreign currency exchange rates.
Parker-Hannifin's return on equity climbed 217 basis points to 18.68% in the quarter, and cash and cash equivalents rose 6.9% to $187.92 million. However, the company suffers from a declining operating margin as well as a high debt level. In addition, a significant portion of its revenue comes from customers outside the U.S., leaving it susceptible to adverse foreign policy and currency fluctuations.