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.
produces fabricated metal products. It has been rated a buy since August 2005. The company's revenue grew 18.7% in the second quarter of 2007 over the year-earlier period, exceeding the industry average of 4.6%. Its debt-to-equity ratio of 0.55 is below the industry average, implying that there has been successful management of debt levels.
Valmont has demonstrated a pattern of positive EPS growth over the past two years, a trend that should continue. Powered by strong earnings and other factors, the company's stock rose 49.37% in the 12 months prior to Aug. 3, and while it is now somewhat expensive compared with its industry peers, the company's strengths justify the higher price level. Valmont's low profit margins are no threat to the company's buy rating at this time.
, a maker of aerospace, defense and electronics products, has been rated buy since July 2005. It has a largely solid financial position with reasonable debt levels by most measures, an impressive record of earnings-per-share growth, good cash flow from operations and solid stock price performance.
The company has demonstrated a pattern of positive EPS growth over the past two years. Its revenue grew 31.62% in the second quarter over the year-earlier period, above the industry average of 6.3%. The sharp appreciation in Heico's stock price over the last year has driven it to a level that is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify these levels.
Clinical diagnostics company
Dade Behring Holdings
( DADE) has been rated buy since August 2005. The company's stock has performed solidly, with growth in revenue and earnings per share, an increase in net income and good cash flow from operations. While the company may harbor some minor weaknesses, they are not expected to have a significant impact on results.
In July, Dade Behring Holdings said second-quarter earnings climbed 34% to $50.3 million, or 61 cents a share, while sales increased 8% to $480.8 million. Despite its growing revenue, the company underperformed as compared with the industry average of 8.2%. Net operating cash flow has significantly increased by 77.75% to $95.10 million.
Designing, manufacturing and servicing electrical components and equipment for aircraft and industrial engines,
( WGOV) has had a buy rating since August 2005. It demonstrates solid revenue growth, a very low debt-to-equity ratio and a largely solid financial position with reasonable debt and valuation levels. The company's stock price increased by 96.3% in the year ended on Aug. 3, and should continue to move higher. These strengths outweigh the company's subpar net income growth.
provides industrial services and engineered products to the steel, construction, railways and energy industries. It has been rated a buy since August 2005. The company demonstrates robust revenue growth, good cash flow from operations, net income growth that has outperformed its industry average and a pattern of positive EPS growth over the past two years. Powered by these strong financial results, Harsco's stock has appreciated by 38.07% in the 12-month period prior to Aug. 3.
The growth has put it at a price level that is relatively expensive compared with the rest of its industry, but given Harsco's strengths, the higher price level is justified. Harsco's strengths also outweigh the company's low profit margins.