Each business day, 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
Top 5 Fast-Growth Stocks
Amphenol ( APH), which has been rated a buy since October 2005, designs, manufactures and markets electrical, electronic and fiber-optic connectors. Third-quarter revenue increased 15.3% over a year ago to $733.85 million, supported by healthy demand from the military, commercial aerospace and automotive markets across all geographic regions. Net income grew 37.2% to $91.5 million, benefiting from margin expansion and lower taxes.
Greif ( GEF) manufactures and distributes industrial packaging products through three segments: industrial packaging and services, paper, packaging and services and timber. It has been rated a buy since December 2005. The company maintains a largely solid financial position with reasonable debt levels, robust revenue and EPS growth and a solid stock price performance. These strengths outweigh the company's low profit margins. Fiscal-year fourth-quarter revenue climbed 19.9% over a year ago, outpacing the industry average of 14.3%. EPS increased 30.3% over the same period, to $1.16 per share in the fourth quarter compared with 89 cents a share in the same period last year. Greif has demonstrated a pattern of positive EPS growth over the past two years, and this trend is expected to continue. In addition, its debt-to-equity ratio of 0.68 is less than that of the industry average, implying that there has been relatively successful management of debt levels.
Airgas ( ARG), which distributes industrial, medical and specialty gases, and welding, safety and related products, has been rated a buy since December 2005. The company's strengths can be seen in several areas, such as its robust revenue growth, reasonable valuation levels, solid stock price performance, impressive record in EPS growth and net income. These strengths outweigh the fact that the company has had generally poor debt management on most measures evaluated by TheStreet.com Ratings. Airgas' strengths should also outweigh its generally poor debt management. Fiscal-year second-quarter profit increased 28% to $50.6 million, or 60 cents a share. The company has demonstrated a pattern of EPS growth over the past two years and TheStreet.com Ratings feels that this trend should continue. The company's stock has risen sharply over the past year, and it should continue to move higher.
Chicago Bridge & Iron ( CBI), an engineering and construction company, has been rated a buy since August 2006. The company's strengths can be seen in several areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, impressive record of EPS growth and compelling increase in net income. These strengths are expected to outweigh the company's weak operating cash flow. Third-quarter net income increased 81.1% on the year to $58.74 million, or 61 cents a share, while revenue climbed 36% to $1.17 billion. The company has demonstrated a pattern of EPS growth over the past two years and this trend is expected to continue. The market expects full-year earnings to reach $1.76 a share.
Air Products and Chemicals ( APD), a chemical and gas producer, has been rated a buy since December 2005 on the basis of its strong revenue growth, expanding margins and increased net income, coupled with a notable return on equity. Higher pricing and volumes across various business segments have supported the revenue growth. Fiscal-year fourth-quarter profit increased 128% over a year ago, led by higher net sales, to $292.80 million, or $1.31 per share. Sales climbed by 10.3% to $2.60 billion during the same timeframe, due to higher pricing and volumes in the merchant gases segment and higher volumes in its tonnage gases and electronics and performance materials segment. Air Products and Chemicals faces risk from high competition from several large, global competitors. Furthermore, unfavorable effects of currency fluctuations may adversely affect the top line of the company.
Our quantitative ratings are based on a variety of historical fundamental and pricing data and represent our opinion of a stock's risk-adjusted performance relative to other stocks. However, they do not incorporate all of the factors that can alter a stock's performance. For those reasons, we believe a rating alone cannot tell the whole story, and should be part of an investor's overall research.