Each business day, 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 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.
manufactures electronic instruments and electromechanical devices. The company has operations throughout the U.S. and in more than 30 other countries. The company's Electronic Instruments segment manufactures advanced monitoring, testing, calibrating and display instruments for the aerospace, power and industrial markets worldwide. The Electromechanical segment produces highly engineered electromechanical connectors for hermetic (moisture-proof) applications, specialty metals for niche markets, and brushless air-moving motors, blowers and heat exchangers. The products are used in floor care and other specialty applications.
Ametek has been rated a buy since November 2002. Strengths include consistent revenue, earnings per share, and net income growth, as well as a solid stock performance. In addition, Ametek's minimal exposure to the housing and automobile markets could insulate it from the sluggish U.S. economy. For the first quarter of 2008, the company reported a 30% year-over-year increase in earnings, led by operational improvements and a strong revenue growth of 21%. Continuing its pattern of EPS growth over the past two years, the company again reported improved EPS to 62 cents in the most recent quarter from 48 cents in the first quarter of 2007. Net income grew to $66.36 million from $50.90 a year ago. Furthermore, operating cash flow increased 39% to $77 million. Additionally, the company recently paid a quarterly dividend of 6 cents a share on March 31.
Going forward, Ametek estimates revenue for the full year 2008 to increase in the high teens on a percentage basis, while earnings are estimated to be in the range of $2.47 to $2.52 a share. Management also expects earnings for the second quarter to be approximately 61 cents to 63 cents a share, an increase of 13% to 17% over last year's second-quarter results. However, these results could be negatively affected should the company fail to successfully integrate its recent acquisitions. Other risks include the price and availability of raw materials and changes in the competitive environment.
is an international higher education company that operates DeVry University. Classes are offered at a number of locations, as well as through DeVry University Online.
The company has been rated a buy since January 2007. DeVry's strength's can be seen in its impressive record of EPS growth, compelling growth in net income, revenue growth and a largely solid financial position. For the third quarter of fiscal 2008, DeVry reported EPS of 53 cents, vs. 32 cents a year ago. This increase continues the company's demonstrated pattern of EPS growth over the past two years, a trend that we feel should continue. The company's third-quarter net income of $38.3 million represents an increase of 67% year over year. DeVry also has no debt to speak of, and its revenue rose by 18% in the second quarter.
In other developments, the company disclosed on May 19 that federal investigators have launched an investigation into the company's recruitment practices, and that management is cooperating fully with this probe. While we believe the stock is a strong one based on its quantitative merits, this is a situation that bears watching.
has been manufacturing an array of valves since the early 1900s. Valves range in application from generic products for heating and cooling to more specialized steam catapult valves on nuclear-powered aircraft carriers and cryogenic valves used in the space shuttle. The company also designs, makes, and distributes a variety of related products, such as fittings, actuators, condensate pumps, flow meters and water heaters. Circor provides a range of services to assist customers in the installation and maintenance of fluid-control systems. The company operates 16 manufacturing facilities in the U.S., Canada, Western Europe and China and services more than 12,000 customers in more than 119 countries.
Circor has been rated a buy since November 2004. The company's strengths can be seen in its impressive record of EPS growth, compelling growth in net income, revenue growth, and solid stock price performance. Earnings per share grew 69% for the first quarter of fiscal year 2008 when compared to the same quarter of fiscal 2007, which brought its three year average EPS growth rate to a solid 48%. The company reported 9.5% growth in its revenue over the same period, which trailed its industry average but allowed it to boost net income, which grew 74% for the interim. In addition, as of the market's close on May 20, Circor's share price has jumped 39% compared to its closing price of one year prior. The stock currently trades at a valuation level that is in line with its peer average and a discount to the
We feel that the company's strengths outweigh a relatively low operating profit margin of 11%. In its release reporting first-quarter results, the company indicated that its orders grew 27% year over year on the back of strength in its naval, aerospace and energy markets. Its backlog jumped 45% from the year-ago quarter. Management is guiding investors to expect EPS for the second quarter to range from 74 cents to 83 cents, excluding special charges. This compares with 60 cents for the second quarter of fiscal 2007.
designs, manufactures, and sells pumps and related equipment for use in various liquid-handling applications, such as wells, wastewater, agricultural systems, fire protection and military uses. The company's pumps have a variety of uses, from pumping refined petroleum products for fueling aircraft and water for fire fighting to ice cube dispensing equipment and office copy machines.
Our buy rating Gorman-Rupp has not changed since November 2005. The company's strengths can be seen in multiple areas, such as its revenue and net income growth, largely solid financial position and impressive record of EPS growth. Revenue for the first quarter of fiscal 2008 rose 9.4% year over year. The company's first-quarter net income of $7.2 million represents a 41% increase from the $5.1 million reported one year ago. As a result, the company was able to report record EPS of 43 cents, representing an improvement from 30 cents a year ago. This adds to the company's trend of positive EPS growth over the past two years. Finally, with no debt to speak of, Gorman-Rupp has a debt-to-equity ratio of zero.
Management was pleased with what it considers to be a very good start to a year in which Gorman-Rupp will celebrate its 75th anniversary. The company reported that it will continue to grow in the areas of water and wastewater handling and infrastructure renewals and expansion. Consolidation and expansion of the company's Mansfield, OH facilities is expected to result in increased efficiency and capacity in the future. Bear in mind, however, that the machinery industry as a whole faces challenges from rising commodity costs. Customers have historically absorbed the commodity increases as surcharges that have helped cover the difference, but there is no guarantee that this will continue.
is an energy holding company that engages in the acquisition, development, exploration, and production of oil, natural gas, and natural gas liquids in the United States. The company has two subsidiaries, Energen Resources and Alabama Gas. Energen Resources, which explores for and produces oil and gas, generates about 85% of the company's consolidated net income. Alabama Gas is the largest natural gas distributor in Alabama. Energen is based in Birmingham, Ala.
Energen has been rated a buy since January 2006. A number of positive investment measures should help this stock outperform the majority of stocks that we rate. Energen's revenue increased slightly in the first quarter of fiscal 2008, rising 5.9% year over year. This growth appears to have helped boost the company's earnings per share by 13%. In addition, net income improved, rising 12% to $116.7 million from $103.9 million a year ago. Energen's expanding profit margins are also strengths, as the company reported that its gross profit margin increased to 45.60%, compared to 42.87% in the first quarter of 2007.
Management was pleased with the first-quarter results and is excited about Energen's outlook. The company has capitalized on the recent upward momentum of oil and gas market prices by strengthening its hedge position for 2009 and 2010 production in order to help lock in earnings and cash flow growth. Additionally, management announced its new earnings guidance for fiscal 2008, with earnings per diluted share now estimated to be in the range of $4.15 to $4.55 due to the current market strength of commodity prices. However, any significant decline in natural gas and oil prices along with any unfavorable regulatory movements could negatively affect the company's business and future profitability.
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.
This article was written by a staff member of TheStreet.com Ratings.