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 we look at small-caps. These are stocks of companies that have market capitalizations of between $50 million and $500 million and rank near the top of all stocks rated by our proprietary quantitative model, which looks at more than 60 factors. In addition, the stocks must be followed by at least one financial analyst who posts estimates on the Institutional Brokers' Estimate System. The stocks 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.

Rated a buy since December 2005,

American Software

(AMSWA) - Get Report

develops software and services for enterprise management and collaborative supply chains. Strong EPS growth over the past year has helped the company's stock price appreciate faster than the

S&P 500

. And barring a major bear market, the stock should continue to move higher. The company has no debt to speak of, and maintains a quick ratio that demonstrates the ability to cover short-term cash needs. While American Software may harbor some minor weaknesses, they are unlikely to have a significant impact on results.

A buy since May 2005,

Waste Industries USA

(WWIN)

provides solid waste collection, transfer, disposal and recycling services to commercial, industrial and residential customers in six states in the Southeast.

It has demonstrated improved operating margins due to pricing initiatives, higher productivity gains and increased internalization of waste into its landfills. The company also completed acquisitions in South Carolina and Georgia that will boost hauling revenue and strengthen its routes in desired markets.

The solid-waste industry is very competitive and requires considerable labor and capital resources, and it is subject to extensive federal, state and local environmental laws and regulations. For these reasons, any changes in the economic, legal and regulatory environment could hurt Waste Industries' future financial performance.

EnergySouth

( ENSI) is a holding company concentrated on the purchase, distribution, storage and transportation of natural gas in southwest Alabama. It has been rated a buy since May 2005. The company's strengths include revenue growth that has outpaced the industry average and a pattern of EPS growth over the past year.

The company's stock is expensive relative to its peers, but given its performance, the higher price is justified.

Balchem

(BCPC) - Get Report

is a chemical company that makes specialty performance products for the food, nutritional, feed, pharmaceutical and medical sterilization industries. It has been rated buy since May 2005.

The company has demonstrated solid stock-price performance and growth in earnings per share and revenue. It has a largely solid financial position with reasonable debt levels by most measures and expanding profit margins. TheStreet.com Ratings believes these strengths outweigh the company's somewhat disappointing return on equity.

Medtox Scientific

( MTOX) provides forensic and clinical laboratory services, and has been rated a buy since October 2005. The company has shown impressive stock-price appreciation and net income growth that has significantly exceeded that of the

S&P 500

and its industry. It has also demonstrated strong earnings growth over the past two years.

Although no company is perfect, there are currently no significant weaknesses that are likely to detract from the generally positive outlook.