Every day, TheStreet.com Ratings compiles a list of the top 10 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.

The top 10 rankings are based on our ratings, which assess risk-adjusted returns as well as other criteria specific to the type of stock.

We update the lists at the end of the business day on the basis of information available at the close of the previous trading session. Beginning this week, we are publishing a daily article that takes a closer look at the ratings of the stocks on one of the lists.

Today we'll look at mid-cap stocks. These are stocks with a market capitalization of between $500 million and $10 billion that rate near the top of TheStreet.com Ratings' coverage universe. In addition, the stocks must be followed by at least one financial analyst who posts earnings estimates on IBES. The stocks are ranked in the order of their potential to appreciate.

Gorman-Rupp ( GRC), which designs, makes and sells pumps and related equipment for use in construction, industrial, petroleum, agricultural, fire and military applications, has been rated a buy since November 2005. The company's gross profit margin for the third quarter of its fiscal year 2006 increased from the same period a year earlier. It managed to grow both sales and net income at a faster pace than the average competitor in its industry. Gorman-Rupp is also extremely liquid, and it increased its liquidity in the fiscal third quarter over the year-earlier period, indicating improved cash flow.


Heico Corp. ( HEI), which makes FAA-approved jet engine and aircraft component replacement parts, has been rated a buy since December 2004. Strengths include notable return on equity, robust revenue growth, a largely solid financial position with reasonable debt levels by most measures, an impressive record of earnings-per-share growth and compelling growth in net income. Although no company is perfect, TheStreet.com Ratings currently does not see any significant weaknesses that are likely to detract from the generally positive outlook.


Fuller ( FUL), which manufactures and markets adhesives and specialty chemical products globally, has been rated a buy since April 2005. The company has demonstrated a pattern of positive earnings-per-share growth over the past two years, and TheStreet.com Ratings believes this trend should continue. This earnings growth fuelled a 57% surge in the stock price in 2006, outpacing the S&P 500. Though any stock can fall in a bear market, TheStreet.com Ratings believes the stock has more room to rise in almost any other market.


CNA Surety ( SUR), which provides a wide selection of surety products from small commercial bonds to large contract bonds, has been rated a buy since December 2004.

The company's strengths include notable return on equity, good cash flow from operations, solid stock price performance, revenue growth and largely solid financial position with reasonable debt levels by most measures. CNA Surety's third-quarter return on equity exceeded that of the year-earlier period, a clear sign of strength within the company. Its net operating cash flow for the third quarter of 2006 increased by 240% over the year-earlier period. In addition, CNA Surety vastly surpassed the industry average cash flow of growth rate of 71%.

Although no company is perfect, TheStreet.com Ratings currently does not see any significant weaknesses that are likely to detract from the generally positive outlook. The company's shares rose 44% in 2006, outpacing the S&P 500. While any stock can fall in a bear market, TheStreet.com Ratings believes the stock has more room to rise in almost any other market.


Hub Group ( HUBG), a full-service transportation provider, offering intermodal, truck brokerage and logistics services throughout North America, has been rated a buy since December 2004. The company's strengths include its notable return on equity, revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings-per-share growth and compelling growth in net income. TheStreet.com Ratings believes these strengths outweigh the fact that the company shows low profit margins.


Wolverine World Wide ( WWW), which designs, makes and sells various types of footwear, has been rated a buy since January 2005. The company's strengths include a notable return on equity, revenue growth, a largely solid financial position with reasonable debt levels by most measures, solid stock price performance and growth in earnings per share.

TheStreet.com Ratings believes these strengths outweigh the fact that the company shows weak operating cash flow. Wolverine's third-quarter 2006 revenue growth slightly outpaced the industry average of 6.9%, while third-quarter revenue increased by 7.1% over the year-earlier period. This revenue growth appears to have trickled down to the company's bottom line, improving the earnings per share. Wolverine's return on equity also improved slightly on the year; this can be construed as a modest strength in the organization.


Core Laboratories ( CLB), which provides proprietary and patented reservoir description, production enhancement and reservoir management services to the oil and gas industry, has been rated a buy since December 2004. The company's strengths include its notable return on equity, an impressive record of earnings-per-share growth, compelling growth in net income, robust revenue growth and good cash flow from operations.

TheStreet.com Ratings believes these strengths outweigh the fact that the company is trading at a premium valuation on the basis of our review of its current price compared with such things as earnings and book value.


Metler-Toledo ( MTD) manufactures and markets weighing instruments for use in laboratory, industrial, packaging, logistics and food retailing applications. It has been rated a buy since December 2004. Our rating is driven by MTD's third-quarter performance and above-average return on equity. We also expect Metler-Toledo to benefit from its "Spinnaker" initiatives to improve sales, service and marketing operations.

MTD has consolidated its manufacturing facilities from 29 to 19, and has been shifting some of them to China to reduce costs; this should fetch higher margins in the future. The company has also strengthened its presence in the emerging Asian markets, where consumer spending levels are increasing.

The weighing and analytical instruments markets are fragmented both by region and by application, however. As a result, Metler-Toledo faces numerous regional and specialized competitors, which are well established in their market. The company is also exposed to foreign-exchange risk, as it generates nearly 62.0% of its revenue outside the U.S.


VF Corp. ( VFC) has been rated a buy since October 2004. It is already the world's largest apparel company by revenue, and it has strong and diversified brands with solid market positions in several product categories. VF already has a large presence in Europe, and TheStreet.com Ratings expects it to benefit from its expansion plans in India and China. However, VF is highly dependent on a few customers for its revenue, and a significant reduction of orders from any of them could affect its business.


Harleysville Group ( HGIC) is a holding company for property and casualty insurers that operates primarily in the eastern and midwestern U.S. It has been rated a buy since December 2004. The company's strengths include its notable return on equity, solid stock price performance, an impressive record of earnings-per-share growth, revenue growth and a largely solid financial position with reasonable debt levels by most measures. TheStreet.com Ratings believes these strengths outweigh the fact that the company shows weak operating cash flow.

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