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, mid-cap stocks are in the spotlight. These are stocks of companies that have market capitalizations of between $500 million and $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.
First up is the natural gas purchasing, transportation and distribution company
, which has been rated a buy since February 2006. The company has enjoyed notable stock price appreciation, increased net operating cash flow and attractive valuation levels.
These strengths outweigh the company's generally poor debt management by most measures evaluated by TheStreet.com Ratings.
West Pharmaceutical Services
makes components and systems for injectable drug delivery and plastic packaging. It has been rated a buy since May 2005. The company's revenue growth has outpaced the industry average, leading to sharp stock price appreciation. It also has net income growth that has significantly exceeded the
and a pattern of EPS growth over the past two years.
These strengths outweigh the company's low profit margins.
( VSEA) has been rated a buy since May 2005. The company makes semiconductor processing equipment used in the fabrication of integrated circuits.
The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, solid stock price performance and impressive record of earnings-per-share growth.
TheStreet.com Ratings feels that although the company may harbor some minor weaknesses, they are unlikely to have a significant impact on results.
Petroleum refiner and marketer
has been rated a buy since May 2005.
The company's stock has surged over the past year, thanks largely to strong earnings growth. TheStreet.com Ratings expects Tesoro to build on these gains in the coming months.
TSO's biggest weakness is low profit margins.
Rounding out the list is
, a manufacturer of specialty metals and engineered products that has earned a buy rating since March 2005. The company shows a convergence of positive investment measures, including a notable return on equity, impressive stock price appreciation and compelling EPS growth.
The company's low profit margins are unlikely to threaten its buy rating.