Each weekday, TheStreet.com Ratings compiles a list of the top five stocks in five categories -- fast-growth, all-around value, large-cap, mid-cap and small-cap -- and publishes these lists in the
A buy since May 2005, Waste Industries USA ( WWIN) tops this week's list. The company provides solid waste collection, transfer, disposal and recycling services to commercial, industrial and residential customers in six states in the Southeast. It demonstrates improved operating margins due to pricing initiatives, higher productivity gains and increased internalization of waste into its landfills. The company also completed acquisitions in South Carolina and Georgia that will boost hauling revenues and strengthen its routes in desired markets. The solid waste industry is very competitive and requires considerable labor and capital resources, and is subject to extensive federal, state and local environmental laws and regulations. For these reasons, any changes in the economic, legal and regulatory environment could hurt its future financial performance.
Multi-Color Corporation ( LABL) supplies decorative labels and packaging services to consumer product and food and beverage companies, retailers and container manufacturers. The company has been rated a buy since February 2006. Multi-Color displays significantly increased net income and notable stock price appreciation with good potential for further growth. The market expects EPS growth in Multi-Color's fiscal 2007. These strengths outweigh the company's low profit margins.
Martin Midstream ( MMLP) provides marine transportation, terminalling, distribution and midstream logistical services for producers and suppliers of hydrocarbon products and byproducts. It has been rated a buy since June 2005. The company shows revenue growth, significantly increased net income growth and strong stock price performance. These positives outweigh concerns about Martin Midstream's somewhat disappointing return on equity.
EnergySouth ( ENSI) is a holding company concentrated on the purchase, distribution, storage and transportation of natural gas in southwest Alabama. It has been rated a buy since May 2005. The company's strengths include revenue growth that has outpaced the industry average and a pattern of EPS growth over the past year. Its stock is expensive relative to its peers, but given its performance, the higher price is justified. Though EnergySouth shows low profit margins, its overall financial strengths outweigh its weaknesses.
Rounding out the list is AAON ( AAON), a manufacturer of air-conditioning and heating equipment. The company has been rated a buy since June 2005. AAON's strengths can be seen in multiple areas, such as revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, good cash flow from operations and solid stock price performance. The main risk to the buy rating is low profit margins.