AAON ( AAON), a manufacturer of air-conditioning and heating equipment, has been rated a buy since June 2005. AAON's strengths can be seen in multiple areas, such as revenue growth, a largely solid financial position with reasonable debt levels by most measures, an impressive record of EPS growth over the past two years, good cash flow from operations and solid stock price performance.
Telecom services provider Atlantic Tele-Network ( ATNI) has been rated a buy since May 2005. It demonstrates strong revenue growth and offers a good dividend yield at the stock's current price level. In order to strengthen its wireless business, the company has accelerated its spending to expand geographically and has also increased promotional efforts to enhance brand awareness. Atlantic operates in under-served, rural markets in the U.S., Bermuda and Guyana, all of which provide ample opportunities for growth. The principal risks include termination of the company's exclusive right to provide wireline local and long-distance telephone services in Guyana as well as any adverse regulatory developments or economic conditions. Also, intensifying competition poses a significant threat to Atlantic Tele-Network's future prospects.
Rated a buy since December 2005, American Software ( AMSWA) develops software and services for enterprise management and collaborative supply chains. Strong EPS growth over the past year has helped the company's stock price appreciate faster than the S&P 500. Barring a major bear market, the stock should continue to move higher. The company has no debt to speak of, and it maintains a quick ratio that demonstrates the ability to cover short-term cash needs. While American Software may harbor some minor weaknesses, they are unlikely to have a significant impact on results.
Brewer of Sam Adams beer and other alcoholic drinks Boston Beer ( SAM) has been rated a buy since August 2005. The company shows strong revenue growth and has no debt to speak of. It maintains a quick ratio of 2.75, which demonstrates the ability to cover short-term cash needs. Boston Beer has shown a pattern of EPS growth over the past two years, a trend that should continue into the year ahead. Strong EPS have elevated the company's stock price to a level that somewhat expensive compared with the rest of its industry. Given its other strengths, the higher price level is justified. The positives also outweigh the company's weak operating cash flow.
Electronic-components maker Spectrum Control ( SPEC) has been rated buy since August 2005. The company reported robust revenue growth for the second quarter of 2007, coming in higher than the industry average of 3.0%. Spectrum Control has a solid financial position with reasonable debt levels, solid stock price performance, an impressive record of earnings-per-share growth and compelling growth in net income. These strengths outweigh the company's low profit margins.