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.
Today's list starts with
, an aircraft-components manufacturer that has maintained a buy rating since August 2005. The company has demonstrated impressive growth in revenue, net income and earnings per share, and has good cash flow from operations. It has also shown a pattern of positive EPS growth over the past two years, a trend TheStreet.com Ratings team believes will continue in the coming year. Triumph also has impressive net operating cash flow.
Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.
is an educational travel company that organizes and promotes international and domestic programs for students, athletes and professionals. It has carried a buy rating since October 2005. The company's positives should give investors a better performance opportunity than most stocks covered by TheStreet.com Ratings. Its revenue growth has greatly exceeded the industry average, and its improved return on equity is a signal of significant strength within the corporation. Additionally, its debt-to-equity ratio of 0.01 is beneath that of the industry, suggesting very successful debt management.
Strengths like these outweigh Ambassadors' subpar net income growth.
Welding equipment maker
has held a buy rating since August 2005. The company enjoys a largely solid financial position, solid stock price performance and impressive growth in revenue, earnings per share and net income. Its debt-to-equity ratio of 0.13 is lower than that of the industry average, implying very successful management of debt levels. Along with the favorable ratio, the company maintains an adequate quick ratio of 1.44, which illustrates the ability to avoid short-term cash problems.
These factors should overcome Lincoln's low profit margins.
Rated a buy since July 2005,
makes various biochemical and organic chemicals worldwide. The company's revenue has been growing as a result of new sales initiatives. Its acquisition of Epichem Ltd. has also produced favorable exchange-rate effects. Net income also increased, bolstered by lower interest expense and a marginal decline in the effective tax rate. Sigma-Aldrich is a relatively underleveraged company compared with its peers, carrying a total debt-to-equity ratio of 0.39 as of the second quarter of fiscal 2007. The company also generates good operating cash flow and had a cash-and-equivalents balance of $190.10 million at the end of the quarter, a strong cash position that aids its ability to leverage and should help the company enhance shareholder value.
Any unexpected hindrance or delay in commercializing the company's strong product pipeline, as well as a slowdown in consumption industries that could affect the company's revenue growth, could present risks to the buy rating.
provides flow equipment products, systems and services to oil, gas and process industries worldwide. It has been rated a buy since August 2005. The company's revenue increased by 32.8% in the second quarter of 2007 compared with the same period the year before. Growth was driven by strong demand for its engineered products and drilling equipment, a result of an increase in drilling and production activities. It should continue solid performance on the basis of a favorable industry outlook and a record order backlog.
Dependence on the oil and gas industry is the major source of risk. High prices for oil could lead to a decline in demand or an increase in the use of alternative energy. This in turn may lead to a slowdown in drilling activity, which would negatively affect Cameron's earnings. There is also a risk of the company not being able to fulfill the huge order backlog, which could not only affect sales and profitability, but also jeopardize customer relations and the goodwill of the company.