Teva, Pegasystems: Top 5 Growth Stocks

Teva Pharmaceutical Industries and Pegasystems are among companies with 'buy' ratings from TheStreet.com.
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BOSTON (

TheStreet

) -- These companies are projected to increase revenue and profit by at least 12% in the coming year. They also have "buy" ratings from our quantitative model, which considers more than 60 factors. They're ordered by their potential to appreciate, starting with the company with the best growth prospects.

Teva Pharmaceutical Industries

(TEVA) - Get Report

is an Israel-based drugmaker.

The numbers

: Second-quarter net income dropped 2% to $521 million and earnings per share fell 11% to 58 cents, hurt by a higher share count. Revenue rose 20% to $3.4 billion. Its gross margin dropped from 58% to 54%, but its operating margin increased from 23% to 24%. A quick ratio of 0.9 indicates less-than-ideal liquidity. A debt-to-equity ratio of 0.4 reflects conservative leverage.

The stock

: Teva is up 20% this year, beating the

Dow Jones Industrial Average

and

S&P 500 Index

. The stock trades at a price-to-earnings ratio of 53, a premium to the market and pharmaceutical peers. The shares offer a 1.2% dividend yield.

Pegasystems

(PEGA) - Get Report

sells software that automates business processes.

The numbers

: Second-quarter profit surged 294% to $11 million, or 30 cents a share, as revenue rose 25% to $64 million. Its gross margin advanced from 59% to 66% and its operating margin grew from 5% to 18%. Pegasystems has an outstanding liquidity position, evident in its quick ratio of 3.9, and holds zero debt.

The stock

: Pegasystems has rocketed 156% this year, beating major U.S. indices. The stock trades at a price-to-earnings ratio of 47, a premium to the market and application software makers. The stock's dividend yield is less than 1%.

NCI

(NCIT)

is a technology consultant for the U.S. government.

The numbers

: Second-quarter profit rose 26% to $5.1 million, or 37 cents a share, as revenue advanced 13% to $109 million. Its gross margin declined from 14% to 13% and its operating margin rose from 8% to 9%. A quick ratio of 1.6 demonstrates ample liquidity and a debt-to-equity ratio of 0.2 indicates modest leverage.

The stock

: NCI shares are flat this year, lagging behind major U.S. indices. The stock trades at a price-to-earnings ratio of 22, a premium to the market, but a discount to tech consultants. The company doesn't pay dividends.

Strayer Education

(STRA) - Get Report

sells training and degree courses in technology, accounting and business.

The numbers

: Second-quarter net income climbed 29% to $28 million, or $2 a share, as revenue increased 29% to $126 million. Its gross margin increased from 69% to 70% and its operating margin climbed from 34% to 36%. Strayer has no debt and a quick ratio of 1.6 indicates ample liquidity.

The stock

: Strayer is up 1% this year, trailing behind major U.S. indices. The stock trades at a price-to-earnings ratio of 33, a premium to the market and education peers. The stock's dividend ratio is less than 1%.

Lance

(LNCE)

makes snacks, including Cape Cod Potato Chips and Archway Cookies.

The numbers

: Second-quarter net income surged 252% to $9.5 million, or 30 cents a share. Revenue grew 11% to $237 million. Its gross margin jumped from 41% to 44% and its operating margin rose from 3% to 7%. A quick ratio of 1.1 indicates adequate liquidity and a debt-to-equity ratio of 0.4 demonstrates restrained leverage.

The stock

: Lance has advanced 5% this year, trailing major U.S. indices. The stock trades at a price-to-earnings ratio of 25, which is a premium to the market, but a discount to packaged-food peers. The shares offer a 2.7% dividend yield.

-- Reported by Jake Lynch in Boston

.

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