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
Ratings section of our Web site . This list, updated daily, is based on data from the close of the previous trading session. Today, mid-cap stocks are in the spotlight. These are stocks of companies that have market capitalizations of between $500 million and $10 billion that rank near the top of all stocks rated by our proprietary quantitative model, which looks at more than 60 factors. The stocks must also be followed by at least one financial analyst who posts estimates on the Institutional Brokers' Estimate System. They are ordered by their potential to appreciate. Note that no provision is made for off-balance-sheet assets such as unrealized appreciation/depreciation of investments, market value of real estate or contingent liabilities that might affect book value. This could be material for some companies with large underfunded pension plans. Manitowoc ( MTW) manufactures and markets cranes and related products, food service equipment and marine products. It has been rated a buy since September 2005. The company demonstrates notable revenue growth, significant earnings-per-share improvement, impressive stock price appreciation and net income growth that has significantly outpaced that of both the S&P 500 and its industry. Its price level is now somewhat expensive compared with the rest of its industry, but given the company's strengths, the higher price is justified.
Circor International ( CIR) engages in the design, manufacture and distribution of valves and fluid control products. It has been rated a buy since September 2005. The company's year-on-year revenue growth of 14.9% in the second quarter outpaced the industry average of 5.1%. Its earnings improved by 50% over the same timeframe, continuing a two-year pattern of positive EPS growth. TheStreet.com Ratings believes this trend will continue. Circor has also seen good cash flow from operations and its stock price increased 50.92% in the 12 months prior to Sept. 28. These strengths outweigh the company's low profit margins. Range Resources ( RRC) engages in the exploration, development and acquisition of oil and gas properties primarily in the Southwestern, Appalachian and Gulf Coast regions of the U.S. It has been rated a buy since August 2005. The company's third-quarter earnings climbed 15% on the year to $58.9 million, or 39 cents a share. Excluding items, Range Resources earned $64.4 million, or 42 cents a share. Revenue increased 10% to $242.4 million. Range Resources is expected to continue to benefit given the favorable industry outlook. The company is aggressively pursuing its drilling and acquisition programs even at the cost of raising more debt. However, oil exploration is risky, and the current success rate may not continue. Moreover, oil and gas prices are highly volatile and cyclical in nature, and are already trading at 12-month highs. Any downtrend may affect profitability.
Specialty chemical company Lubrizol ( LZ) has been rated a buy since September 2005. Powered by strong earnings growth, the company's stock has jumped 45.68% over the 12 months prior to Sept. 27, and it should continue to move higher. Lubrizol has demonstrated a pattern of positive EPS growth over the past two years, a trend that TheStreet.com Ratings expects it will maintain. Net income growth has greatly exceeded that of the S&P 500. These strengths outweigh the company's low profit margins. Welding equipment maker Lincoln Electric ( LECO) has held a buy rating since August 2005. The company enjoys a largely solid financial position, solid stock price performance and impressive growth in revenue, earnings per share and net income. Its debt-to-equity ratio of 0.13 is lower than that of the industry average, implying very successful debt management. The company also maintains an adequate quick ratio of 1.44, which illustrates the ability to avoid short-term cash problems. These factors should overcome Lincoln's low profit margins.