Five Fast-Growing Stocks on the Move - TheStreet

Five Fast-Growing Stocks on the Move

Neogen, Medco and Teva are rated "buy" by TheStreet.
Author:
Publish date:

BOSTON (TheStreet) -- Stocks are wavering as investors try to find the companies most likely to continue last year's rally. Here are five "buy"-rated stocks that are poised to grow.

5.Teva Pharmaceuticals

(TEVA) - Get Report

is an Israeli drugmaker.

The numbers

: Third-quarter net income inched up 3% to $649 million, but earnings per share fell 6% to 72 cents. Revenue increased 25% to $3.6 billion. Teva's gross margin narrowed from 57% to 54%, but its operating margin expanded from 23% to 24%. A quick ratio of 0.9 indicates less-than-ideal liquidity. A debt-to-equity ratio of 0.3 reflects modest leverage.

The stock

: Teva has risen 40% during the past year, beating the

Dow Jones Industrial Average

and

S&P 500 Index

. The stock trades at a price-to-earnings ratio of 54, a premium to drugmakers. The shares offer a 0.8% dividend yield.

4. Medco Health Solutions

(MHS)

is a pharmacy benefit manager.

The numbers

: Third-quarter net income increased 13% to $336 million and earnings per share climbed 19% to 69 cents, boosted by a lower share count. Revenue grew 18% to $15 billion. Medco's gross margin remained steady at 7%, and its operating margin was unchanged at 4%. A quick ratio of 1 reflects adequate liquidity. A debt-to-equity ratio of 0.7 indicates reasonable leverage.

The stock

: Medco has advanced 57% during the past year, outpacing major U.S. indices. The stock trades at a price-to-earnings ratio of 27, a premium to health care service peers. Medco doesn't pay dividends.

3. Lincoln Educational Services

(LINC) - Get Report

provides career education.

The numbers

: Third-quarter profit more than doubled to $14 million, or 50 cents a share, as revenue grew 48% to $148 million. Lincoln's gross margin rose expanded from 63% to 65%, and its operating margin increased from 10% to 16%. The company has a liquid balance sheet, with $38 million of cash and $37 million of debt.

The stock

: Lincoln has soared 87% during the past year, outpacing major U.S. indices. The stock trades at a price-to-earnings ratio of 14.6, a discount to education peers. Lincoln doesn't pay dividends.

2. Neogen

(NEOG) - Get Report

sells food safety tests.

The numbers

: Fiscal second-quarter profit increased 18% to $4.6 million, or 20 cents a share, as revenue grew 13% to $35 million. Neogen's gross margin contracted from 55% to 53%, but its operating margin expanded from 19% to 21%. The company has an ideal financial position, with $32 million of cash and no debt.

The stock

: Neogen has risen 50% during the past year, trailing major U.S. indices. The stock trades at a price-to-earnings ratio of 36, a premium to health care supply peers. Neogen doesn't pay dividends.

1. DeVry

(DV)

provides career training and degree programs.

The numbers

: Fiscal first-quarter profit increased 57% to $55 million, or 76 cents a share, as revenue grew 42% to $431 million. DeVry's gross margin remained steady at 57%, but its operating margin widened from 15% to 18%. A quick ratio of 0.9 indicates less-than-ideal liquidity. A debt-to-equity ratio of 0.1 demonstrates minimal leverage.

The stock

: DeVry shares are little changed during the past year, lagging behind major U.S. indices. The stock trades at a price-to-earnings ratio of 22, on par with education peers. The shares offer a 0.4% dividend yield.

Here are five value stocks for a shaky 2010 >>>

Prior to joining TheStreet.com Ratings, David MacDougall was an analyst at Cambridge Associates, an investment consulting firm, where he worked with private equity and venture capital funds. He graduated cum laude from Northeastern University with a bachelor's degree in finance and is a Level III CFA candidate.