Each weekday, 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 small-cap stocks. These are stocks with a market capitalization of less than $500 million 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.

Atlantic Tele-Network ( ATNI), which provides wireless and wireline telecommunications services in the Caribbean and North America, has been rated a buy since December 2004.

TheStreet.com Ratings' positive outlook on the stock is primarily influenced by the company's acquisition-led growth strategy and its focus on under-served markets. Atlantic Tele-Network's financial performance in the third quarter of its fiscal year 2006 was also encouraging.

The principal risks to our rating include termination of its exclusive right to provide wireline local and long distance telephone services in Guyana, any decline in volume of international long-distance calls, any adverse regularity developments and increasing competition.


Azz ( AZZ) manufactures electrical equipment and components and provides hot dip galvanizing services. The company serves the global markets of power generation, transmission and distribution, and the general industrial markets as well as the U.S. steel fabrication market. It has been rated a buy since January 2005.

Azz's strengths include its notable return on equity, robust revenue growth, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. TheStreet.com Ratings feels these strengths outweigh the fact that the company shows low profit margins.


Multi Color ( LABL) supplies decorative labels and packaging services to consumer product and food and beverage companies, retailers and container manufacturers in the U.S., Canada, Mexico, Central and South America. It has been rated a buy since February 2006.

The company's strengths include its solid stock price performance, an impressive record of earnings per share growth, compelling growth in net income, revenue growth and reasonable valuation levels. TheStreet.com Ratings feels these strengths outweigh the fact that the company shows weak operating cash flow.


Donegal ( DGICA) provides property and casualty insurance, primarily in 18 Mid-Atlantic, Midwestern and Southeastern states. The company's product offerings consist of automobile, homeowners', commercial multiperil, workers' compensation and other lines of insurance. It has been rated a buy since December 2004.

Donegal's strengths include its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, notable return on equity and attractive valuation levels. TheStreet.com Ratings feels these strengths outweigh the fact that the company shows low profit margins.


Dynamex ( DDMX) provides same-day delivery and logistics services in the U.S. and Canada. It 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, solid stock price performance and impressive record of earnings per share growth.

TheStreet.com Ratings feels these strengths outweigh the fact that the company shows low profit margins. Dynamex's gross profit margin for the first quarter of its fiscal year 2007 was essentially unchanged over the year-earlier period, but the company managed to grow both sales and net income at a faster pace than the average competitor in its industry.


Universal Electronics ( UEIC) develops software and builds wireless control devices and chips principally for home entertainment equipment and the subscription broadcasting market. It has been rated a buy since February 2005.

The company's strengths include its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, solid stock price performance and notable return on equity. TheStreet.com Ratings feels these strengths outweigh the fact that the company shows weak operating cash flow.


Riverview Bancorp ( RVSB), the parent company of Vancouver-based Riverview Community Bank, has been rated a buy since December 2004.

The company's strengths include its notable return on equity, solid stock price performance, impressive record of earnings per share growth, robust revenue growth and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.


Heritage Commerce ( HTBK), a California bank holding company, has been rated a buy since December 2004.

The company's strengths include its notable return on equity, revenue growth, growth in earnings per share, solid stock price performance and expanding profit margins.

TheStreet.com Ratings feels these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared with such things as earnings and book value. Heritage's gross profit margin for the third quarter of its fiscal year 2006 was very high at 72.40%, but was down from the year-earlier period. Nevertheless, the company's net profit margin of 20.90% for the quarter compares favorably to the industry average.


Cherokee ( CHKE) markets and licenses the Cherokee, Sideout and Carole Little brands -- as well as related trademarks and other brands it owns or represents -- for family apparel, fashion accessories and footwear, home furnishings and recreational products. It has been rated a buy since December 2004.

The company's strengths include notable return on equity, revenue growth, a largely solid financial position with reasonable debt levels by most measures, expanding profit margins and solid stock price performance. TheStreet.com Ratings feels these strengths outweigh the fact that the company shows weak operating cash flow.


Buffalo Wild Wings ( BWLD), which owns and operates or franchises Buffalo Wild Wings Bar & Grill restaurants, has been rated a buy since November 2006.

The company's strengths include its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income.

TheStreet.com Ratings feels these strengths outweigh the fact that the company shows low profit margins. Buffalo Wild Wings' gross profit margin for the third quarter of its fiscal year 2006 was essentially unchanged from the year-earlier period. However the company has grown sales and net income significantly, outpacing the average growth rates of competitors within its industry.

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