Up first is Albemarle ( ALB), which develops, manufactures and markets specialty chemicals around the world. It has been rated a buy since March 2005. The company's strengths include notable return on equity, impressive increases in net income and a compelling record of EPS growth. These strengths outweigh the company's low profit margins. Albemarle's stock has shown a dramatic appreciation, making it relatively more expensive compared with its industry peers. However, its other strengths justify the higher price levels.
Volvo ( VOLV) sold its car business to Ford in 1999 but still makes trucks, buses, construction equipment and aircraft engine parts. It has been rated a buy since February 2005. The company is poised to benefit from its focus on the Asian commercial vehicle market and, with construction booming worldwide, is positioned to repeat its solid financial results of its record fiscal-year 2006. Last year, Volvo enjoyed outstanding revenue growth, net income increases, lower expense interest and impressive EPS growth. The company's business would be hurt by any slowdown in global economic growth or industrial production, as well as the continued escalation of raw material costs. Additionally, we expect global demand for trucks to slow in 2007 as a result of prebuying in 2006 due to new emissions standards.
Real estate and money management service company Jones Lang LaSalle ( JLL) has had a buy rating since March 2005. The company shows impressive strengths, including a noteworthy return on equity (a sign of internal strength), good cash flow from operations, and a pattern of EPS growth reflected in the impressive appreciation of its share price. With positive investment measures across the board, the company's low profit margins are not a major concern.
Next is AllianceBernstein Holding ( AB), which provides diversified investment management to a broad range of clients and has been rated a buy since March 2005. The company shows a number of positive financial measures, including a striking record of EPS growth, no significant debt and expanding profit margins. These impressive financial strengths justify the relatively high price of the stock.
Rated a buy since January 2005, BG Group ( BRG) produces, transmits and supplies natural gas to more than 20 countries worldwide. Among the company's strengths are stellar revenue growth, a very low debt-to-equity ratio, a pattern of EPS growth over the past two years and net income growth that has significantly exceeded the industry average. Though no company is flawless, BG Group's few minor weaknesses are unlikely to hurt results.
Construction-equipment manufacturer Manitowoc ( MTW) has earned a buy rating since March 2005. The company has three main markets: cranes, food service equipment and marine services in the Great Lakes region. Manitowoc boasts a number of strengths, including notable return on equity, robust revenue growth, consistent EPS growth, solid increases in net income and good cash flow from operations. These strengths outweigh the company's low profit margins.
Oil and gas drilling contractor GlobalSantaFe ( GSF) has been rated a buy since March 2005. Among its impressive financial performance includes robust revenue growth, very low debt-to-equity ratio, a steady pattern of notable EPS growth and expanding profit margins. Though the company has a few minor flaws, TheStreet.com Ratings believes these are unlikely to have a significant impact on results.
Russian-based dairy products and beverages manufacturer Wimm Bill Dann ( WBD) has earned a buy rating since December 2005. The company's revenue growth has outpaced the industry average, and it has demonstrated a positive pattern of EPS growth for the past two years. These results outweigh the stock's premium valuation at its current price when compared with measures such as earnings and book value as of early January.
Designer and clothing manufacturer Polo Ralph Lauren ( RL) has sported a buy rating since March 2005. The company shows revenue growth that outpaces the industry average, and it has compelling growth in net income and widening profit margins. Polo Ralph Lauren has had consistent EPS growth over the past 24 months. The company may show a few minor weaknesses, but they are unlikely to have a significant impact on results.
A buy since March 2005, SEI Investments ( SEIC) provides outsourced business services to manage wealth for the financial services industry. It shows impressive revenue growth, a debt-to-equity ratio well below the industry average, expanding profit margins and an attractive record of EPS growth. Although its stock price is selling at a premium based on TheStreet.com Ratings' review of earnings and book value as of early March, the company's financial strengths justify the higher price levels.