First up 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.
Real estate and money management service company Jones Lang LaSalle ( JLL) has had a buy rating since March 2005. The company has impressive strengths, including a noteworthy return on equity (a sign of internal strength), impressive net operating cash flow and a pattern of earnings-per-share growth reflected in the significant appreciation of its share price. With positive investment measures across the board, the company's low profit margins are not a major concern.
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 March 2005. The company has shown stellar revenue growth, solid stock price performance, outstanding EPS growth and compelling growth in net income. These strengths outweigh the company's low profit margins.
AllianceBernstein Holding ( AB), which provides diversified investment management to a broad range of clients, has been rated a buy since March 2005. The company shows a number of positive financial measures, including a striking record of EPS growth, robust revenue growth, and a very high gross profit margin. These impressive financial strengths justify the relatively high price of the stock, because the company shows no other significant weaknesses.
Cummins ( CMI), rated a buy since March 2005, designs, manufactures, distributes and repairs diesel and natural gas engines and electric power generation systems. The company shows strong EPS growth, solid stock performance and net income growth. It also has a debt-to-equity ratio below that of its industry peers. These strengths outweigh the fact that the company shows low profit margins.
Russia-based dairy products and beverages manufacturer Wimm Bill Dann ( WBD) has earned a buy rating since December 2005. The company has recently completed strategic acquisitions of several companies with strong brand portfolios and leading market positions in their respective regions. It has also shown impressive revenue growth, net income increases and an attractive return on equity. The buy rating is not without risk. Prices for Wimm Bill Dann's major inputs, such as raw milk, juice concentrate, sugar and packaging materials, are facing major inflation. Should the trend continue, the company's future profits might be adversely affected.
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, outstanding gross profit margin and net operating cash flow that has significantly surpassed the industry average. Though no company is flawless, BG Group's few minor weaknesses are unlikely to hurt its rating.
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.
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. Even though 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.
Oil and gas drilling contractor GlobalSantaFe ( GSF) has been rated a buy since March 2005. Among its impressive financial performance are 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 feel they are unlikely to have a significant impact on results.