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 Ratings section of our Web site. This list 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 all stocks rated by our proprietary quantitative model, which looks at over 60 factors. In addition, the stocks must be followed by at least one financial analyst who posts estimates on the Institutional Brokers' Estimate System. Please note that definitions of revenue vary by industry, and this screen does not make adjustments for acquisitions, which can materially affect posted results. Likewise, earnings-per-share growth may be affected by accounting charges, share repurchases and other one-time items. 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. Becton Dickinson ( BDX) is a medical technology company that manufactures and sells a broad range of medical supplies, devices, laboratory equipment, and diagnostic products worldwide. The company has been rated buy since December 2005. Becton Dickinson displayed healthy financial results in the fourth quarter of 2007, with total revenue increasing 12.8% to $1.65 billion due to strong segment sales and favorable currency movements. Net income increased 49.3% to $259.81 million due to top-line growth, margin expansion, and income from discontinued operations. Finally, the company increased its quarterly dividend by 16.3% to $0.28 per share. Looking forward, we expect Becton Dickinson to benefit from its growth strategies, focusing on products that deliver greater benefits to users and achieving operating effectiveness and productivity to accelerate progress. In addition, the increased quarterly dividend combined with a share repurchase program and higher earnings expectations for fiscal 2008 should further increase the company's return on equity. BlackRock ( BLK), a publicly owned investment manager, has been rated buy since December 2005. Its products include a variety of fixed-income, cash management, equity and alternative investment separate accounts and mutual funds. The company is reaping substantial benefits from its September 2006 merger with Merrill Lynch Investment Managers (MLIM) and the October, 2007 acquisition of the fund of funds business of Quellos Group, LLC, which have allowed it to become one of the world's largest asset management firms. The beneficial impact of these business combinations is reflected in the firm's cross-selling successes, which supported its top-line growth throughout fiscal 2007. The company reported robust results for fiscal 2007 on Jan. 17, with assets under management up 21% at $1.36 billion as of the end of 2006. Along with the acquisition of the Quellos business, this helped drive revenue growth of 42% for the quarter and 131% for the year. The firm continues to focus on product diversification. It has made efforts to mitigate any damage to its results from current turmoil in the credit markets by adopting stricter risk-management procedures. Management feels that this focus will enable it to grow despite current challenging market conditions. Our rating is subject to the risk of any unexpected downturn in the securities markets or the economy in general, any deterioration in relative investment performance, and any adverse regulatory developments. Furthermore, slowing trends in the U.S. economy and fluctuations in interest rates could adversely affect the company's performance.
Pharmaceutical Product Development ( PPDI) is a global contract research organization. The company provides drug discovery and developmental services, post-approval expertise, and compound partnering programs for clients and partners that include pharmaceutical, biotechnology, medical device, and government organizations. We have rated this company a buy since February 2006. This rating reflects the company's respectable financial performance and strong fundamentals. Revenues rose 15% year over year in the fourth quarter of 2007. The company has a gross profit margin of 45.1%, which we consider strong. Additionally, the net profit margin is 10.8%. Pharmaceutical Product Development became debt free in the third quarter of 2007, compared with a total debt of $56.65 million one year prior. Furthermore, the company increased its bottom line by earning $1.37 in the fourth quarter of 2007, vs. $1.32 a year ago. Finally, the company has recently increased its annual cash dividends to $40 cents a share, payable quarterly at a rate of 10 cents a share, compared with a previous annual rate of 12 cents a share. We feel that the company's strengths outweigh recent subpar growth in net income. However, increasing cancellation rates and higher expenses remain major concerns. Further, the emergence of small-size companies offering niche services has led to increased competitive pressure. Philippine Long Distance Telephone ( PHI) is the leading national telecommunications provider in the Philippines, providing wireless, fixed-line, and information and communications technology to over 22 million subscribers. The company has been rated buy since January 2006 on the basis its revenue growth, solid stock price performance, expanding profit margins and notable return on equity. The company's revenue growth has slightly outpaced the industry average, rising 11.2% year over year in the third quarter of 2007. A net profit margin of 27.8% compares favorably with the industry average. Even the best stocks can fall in an overall down market, but we feel that the company's strengths outweigh weaknesses such as subpar income growth, a declining pattern in earnings per share over the past year and a year-over-year decrease in return on equity. Greif ( GEF) produces industrial packaging products, operating manufacturing facilities in more than 40 countries. The company also produces containerboard and corrugated products for niche markets in the U.S., and sells timber to third parties from its timberland in the southeastern part of the country. Greif has been rated a buy since January 2006. Greif's strengths include healthy revenue growth, solid stock price performance, growth in earnings per share, an increase in net income, and good cash flow from operations. In the fourth quarter of 2007, the company's revenue grew 19.9% year over year. Net income increased by 31.7%, to $54.9 million. Earnings per share improved by 30.3%. The company's strong earnings growth helped fuel an increase in stock price. Finally, net operating cash flow has significantly increased by 156.64% to $222.61 million when compared to the year-ago period. Looking forward, we feel that the company's demonstrated pattern of EPS growth over the past two years should continue. Despite sluggish market conditions in North America, management expects the company to remain on track for another year of record performance in fiscal year 2008. Our quantitative rating is based on a variety of historical fundamental and pricing data and represents our opinion of a stock's risk-adjusted performance relative to other stocks. However, the rating does not incorporate all of the factors that can alter a stock's performance. For example, it doesn't always factor in recent corporate or industry events that could affect the stock price, nor does it include recent technology developments and competitive dynamics that may affect the company.
For those reasons, we believe that a rating alone cannot tell the whole story and that it should be part of an investor's overall research.