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, fast-growth stocks are in the spotlight. These are stocks of companies that are projected to increase revenue and profit by at least 12% in the coming year and 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. Leading the list today is Garmin ( GRMN), which makes navigation, communications and information devices based on GPS technology. It has been rated a buy since September 2005. The company has shown outstanding revenue growth, notable return on equity and a two-year pattern of steady increases in EPS, and it is carrying no debt. These strengths outweigh the fact that Garmin is trading at a premium valuation according to TheStreet.com Ratings' review of its current price compared with factors such as earnings and book value.
BlackRock ( BLK), an investment manager, has been rated buy since October 2005. The company has an impressive record of growth in revenue, net income and earnings per share, along with good cash flow from operations. BlackRock recently reported third-quarter earnings of $255.2 million, or $1.94 a share, up from $18.9 million, or 28 cents per share, a year ago. These strengths should outweigh the fact that the company' return on equity has been disappointing. Securities brokerage and investment banking firms and other stocks in this sector are highly sensitive to interest rate changes, equity market performance and the general health of the economy. 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 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 50% over the same time frame, 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. Southern Copper ( PCU) mines, smelts and refines copper in southern Peru. It has had a buy rating since August 2005. The company has benefited from higher metal prices, which have translated into strong growth in revenue and net income. Net income growth has been further driven by expanded operating margins, lower net interest expenses and a decline in the effective tax rate. The positive trend in net income has contributed to exceptional return on equity. Southern Copper also has a strong project pipeline, with plans to increase copper output by 100,000 tons by 2009. The principal risk to the buy rating emanates from any undue delay in the completion of Southern Copper's capacity expansion and new mine products. Copper supply also could be affected by production stoppages due to labor strikes and the availability of mining equipment, as well as transportation bottlenecks.