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. 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 a 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.
T. Rowe Price ( TROW), another investment manager, has also been rated a buy since October 2005. The company reported third-quarter net income of almost $175 million, or 63 cents a share, up from $128 million, or 46 cents a share, a year ago. Net revenue rose 27% year over year to $571 million and assets under management totaled $396.8 billion, up 4.5% since June 30. Net revenue rose 27% year-over-year to $571 million. Return on equity totaled 23.51% at the end of the third quarter, surpassing both the industry and broader market averages. During the quarter, the company repurchased 1.59 million shares, and still has 16.64 million common shares remaining under its current repurchase authorization plan. Risks include any unexpected downturn in the securities markets and the economy in general. Southern Copper ( PCU) mines, smelts and refines copper in southern Peru. It has had a buy rating since October 2005. The company's earnings per share improved by 20.3% to $2.13 per share in the third quarter compared with the same period last year, continuing a two-year pattern of positive EPS growth. Southern Copper's stock price increased by 171.89% in the 12 months before Oct. 31, and it should continue to move higher. The company's revenue increased by 13.7% in the third quarter compared with the same period last year, although that figure trailed the industry average of 29.7%. Although no company is perfect, TheStreet.com Ratings do not currently see any weaknesses which are likely to detract from the generally positive outlook.
Freeport-McMoRan Copper and Gold ( FCX) engages in the exploration, mining and production of copper, gold and silver. It has been rated buy since July 2005. Third-quarter profit totaled $775 million, or $1.87 a share, up from $351 million, or $1.67 a share, a year ago. The company has demonstrated a pattern of positive EPS growth over the past two years and this trend is expected to continue. Freeport's operations for the third quarter reflect the March acquisition of fellow miner Phelps Dodge. Because of that deal, revenue rose to $5.07 billion from $1.64 billion a year ago. Any unexpected slowdown in copper demand could lead to an inventory pileup and result in lower copper prices. This, when coupled with higher cost of consumables and energy, could further build pressure on Freeport's operating margin and affect its profitability. Power company ABB Ltd. ( ABB) has been rated buy since May 2006. Third-quarter net profit increased 86% to $738 million on continued growth in demand, particularly for power infrastructure, and further operational improvements. Revenue climbed 26% to $7.19 billion. Orders increased 33% to $8.3 billion, reflecting investments to expand power infrastructure in emerging markets and to replace aging equipment and strengthen grids in mature markets. Demand for more energy-efficient technologies also continued to grow in most industrial sectors. ABB is exposed to certain risks including fluctuation in currency rates, (as it operates in 100 countries), rapidly changing technology and increasing competition, all of which could significantly affect its prospects.