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Each business day, 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 is based on data from the close of the previous trading session. Today we focus on mid-caps. 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.

Pharmaceutical Product Development

( PPDI) is a global contract research organization. The company provides drug discovery and developmental services, post-approval expertise, and compound partnering programs for clients and partners.

We have rated this company a buy since May 2004. This rating reflects the company's respectable financial performance and strong fundamentals. Revenue rose 15% year over year in the fourth quarter of 2007. The company has a gross profit margin of 45%, which we consider strong. Along with this, the net profit margin is 11%. Pharmaceutical Product Development became debt-free during the third quarter of 2007. It carried total debt of $56.7 million one year prior. Furthermore, the company increased its bottom line by earning $1.37 per share for the fourth quarter of 2007, compared with $1.32 in the year-ago quarter. Finally, the company recently increased its annual cash dividend to 40 cents a share, payable quarterly at a rate of 10 cents a share, compared with a previous annual rate of $0.12 per share.

We feel that the company's strengths outweigh recent subpar net income growth. Also, increasing cancellation rates and growing operating expenses remain major concerns. Further, the emergence of small-sized companies offering niche services has led to increased competitive pressure that could affect the firm's prospects.


(BKE) - Get Free Report

markets casual apparel such as denim, sportswear, outerwear, accessories and footwear under the brand names Buckle and The Buckle. The company operates retail stores targeted at young men and women throughout the central, northwestern, southeastern, and southwestern U.S. Along with the company's own brand, its retail stores also offer popular brands such as Lucky Brand Dungarees, Ecko, and Le Tigre. The Buckle is headquartered in Kearney, Neb.

The Buckle has been rated a buy since May 2003. For the third quarter of 2007, the company's revenue rose 17% year over year, and EPS improved 21% over the same period. Net income also increased 26% year over year to $22.2 million from $17.7 million. The Buckle has a gross profit margin of 45%, which we consider strong, especially as it has increased from the year-ago quarter. Finally, the company has a debt-to-equity ratio of zero.

While no company is perfect, we currently do not see any significant weaknesses to detract from this company's generally positive outlook. It is important to bear in mind, however, that the specialty retail industry as a whole could face pressures from a continued housing market contraction or a slowing economy. Such events could lead to a more challenging business environment that could potentially affect The Buckle's results and therefore the buy rating.

FTI Consulting

(FCN) - Get Free Report

provides consulting services to organizations confronting legal, financial and reputational issues. The company has capabilities in specialized industries, including telecommunications, health care, pharmaceuticals and utilities. FTI Consulting has been rated a buy since May 2004.

Our recommendation is based on the company's strong revenue and net income growth, expanding margins, higher returns and positive outlook. Third-quarter 2007 revenue jumped 56% year over year to $253.3 million. Gross profit margin expanded 170 basis points year over year to 47.20%, while operating margin increased 187 basis points to 19.30%. Net income was $23 million, or 50 cents a share, vs. a loss of $290,000, or a penny per share, a year ago.

During the quarter, FTI Consulting closed a public offering of 4.8 million shares of its common stock at $50 per share. Net proceeds from the offering were $232 million, which will be used for general corporation purposes, including the continuation of its strategic acquisition program.

Looking forward, the company reiterated its fiscal year 2007 EPS estimate in the range of $1.92 to $2. However, merger-related challenges remain. Any failure to retain or hire additional qualified professionals in the wake of former professionals joining the competition could negatively affect the performance of the stock.

Darling International

(DAR) - Get Free Report

provides rendering, recycling and recovery solutions to the food industry, processing animal byproducts and used cooking oil into meat and bone meal, tallow and yellow grease. The company also provides grease-trap cleaning services to food service establishments. Darling operates 24 facilities throughout the U.S., as well as a fleet of nearly 640 trucks and tractor-trailers to collect raw materials. Darling markets its finished products worldwide to producers of oleo-chemicals, soaps, pet foods and livestock feed.

We have rated Darling a buy since January 2007. Boosted by higher finished-goods costs and increased raw material volumes, Darling's revenue grew 49% year over year in the third quarter of 2007 to $171.8 million. Gross profit margin and operating margin expanded to 24% and 12%, respectively. Consequently, net income for the third quarter increased more than sixfold to $12.1 million, or 15 cents a share, from $1.8 million, or 2 cents a share. Darling recently transferred its common stock from the American Stock Exchange to the New York Stock Exchange.

Additional regulations on the use of feed by the Food and Drug Administration could adversely affect the company. In addition, the company may fail to achieve the benefits expected from its acquisition of National By-Products.

Atwood Oceanics


is a Houston-based international drilling contractor, engaging in the offshore drilling and completion of exploratory and developmental oil and gas wells worldwide. The company also provides related support, management, and consulting services.

We have rated this company a buy since September 2004, based on its revenue growth, largely solid financial position, EPS growth, and solid stock performance. Revenue rose 49% in the fourth quarter of 2007 to $121.6 million from $81.8 million in the fourth quarter of 2006. Atwood's debt-to-equity ratio is very low at 0.03, implying very successful management of debt levels. During the past fiscal year, the company increased its bottom line by earning $4.37 a share vs. $2.75 a share in the prior year. The company has demonstrated a pattern of positive earnings per share growth over the past two years. Finally, the stock has surged 72% over the past year, powered by its strong earnings growth of 128%.

Although almost any stock can fall in a broad market decline, Atwood should continue to move higher despite substantial gains this past year. Risks to the rating include any pricing fluctuations in the oil and gas industry, the company's ability to secure adequate financing, and governmental regulation and environmental matters.

Our quantitative rating is based on a variety of historical fundamental and pricing data and represents our opinion of a stock's risk-adjusted performance relative to other stocks.

However, the rating does not incorporate all of the factors that can alter a stock's performance. For example, it doesn't always factor in recent corporate or industry events that could impact the stock price, nor does it include recent technology developments and competitive dynamics that may affect the company.

For those reasons, we believe a rating alone cannot tell the whole story, and should be part of an investor's overall research.

This article was written by a staff member of Ratings.