Outrageously Fast Growth Stocks
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.
Axsys Technologies ( AXYS) designs and manufactures precision optical solutions (such as thermal imaging cameras, stabilized camera systems, motion control systems and scanning systems) for use by the U.S. government and high-performance commercial markets in aerospace, defense and other applications. Axsys also distributes precision ball bearings used in a variety of industrial and commercial applications. In the fourth quarter of 2007, the company recorded strong earnings. Demand for both Axsys' traditional business and the recently acquired gyro-stabilized gimbal segment helped generate revenue of $47.9 million, compared with $33.8 million in the fourth quarter of 2006. Sales increased 42% year over year to a record $47.9 million. The company reports that its backlog increased to a record $140 million, which is a 21% increase from the year-ago period. This increase was due to strong demand for infrared cameras and lenses, gimbal systems and military-grade motion control systems. Looking to full-year 2008, management now expects to generate sales in the range of $208 million to $212 million, up from the previously forecast $193 million to $197 million. The company also forecasts earnings per share between $1.70 and $1.75, up from a previous view of $1.57 to $1.60. However, any significant reduction or delay in purchase of the company's products by the U.S. government could have an adverse effect on Axsys' financial performance, as the company derives a significant portion of its revenue from this source. Atwood Oceanics ( ATW) is a Houston-based international drilling contractor, engaging in the offshore drilling and completion of exploratory and developmental oil and gas wells worldwide. The company also provides related support, management and consulting services. We have rated this company a buy since September 2004 based on revenue growth, a solid financial position, earnings per share growth and solid stock performance. Revenue rose 49% in the fourth quarter of 2007 to $121.6 million, up from $81.8 million in the fourth quarter of 2006. Atwood's debt-to-equity ratio is very low at 0.03, implying successful management of debt levels. During the past fiscal year, the company increased its bottom line by earning $4.37 a share vs. $2.75 a share in the prior year. Atwood Oceanics has demonstrated a pattern of positive EPS growth over the past two years. Finally, the stock has surged 72% over the past year, powered by its strong earnings growth.
Although almost any stock can fall in a broad market decline, Atwood should continue to move higher despite its substantial gain in the past year. Risks to the rating include any pricing fluctuations in the oil and gas industry, the company's ability to secure adequate financing, governmental regulation and environmental matters. Credicorp ( BAP) is the largest financial services company in Peru. It conducts its business exclusively through subsidiaries, most notably Banco de Credito del Peru, the country's oldest and largest bank and a leading supplier of integrated financial services. Credicorp's business is primarily commercial banking, insurance and investment banking. While the company's primary operations are in Peru, Credicorp also operates offices in Panama as well as Miami, Fla., and conducts commercial banking activities in Bolivia through Banco de Credito de Bolivia. Credicorp has been rated a buy since May 2004 due to robust revenue growth, notable and growing return on equity and compelling improvement in net income. For the fourth quarter of 2007, revenue rose 43% year over year. This revenue growth appears to have helped boost earnings per share, which improved 49% year over year to $1.18 in the most recent quarter. Net income was reported at $94 million, which represents a 49% increase from $63.1 million reported in year-ago quarter. Finally, return on equity has improved slightly. Powered by strong earnings growth of 49%, Credicorp's stock has surged by 50% over the past year. While the stock is currently trading at a premium to its peers, we feel that Credicorp's strengths justify the higher price levels. Coca-Cola FEMSA ( KOF) is the largest bottler of Coca-Cola trademark beverages in Latin America and the second largest in the world. The company operates in Argentina, Brazil, Colombia, Costa Rica, Guatemala, Mexico, Nicaragua, Panama and Venezuela. In addition to Coca-Cola trademark beverages, the company produces, markets and distributes certain other proprietary brands and beverages licensed from third parties other than Coca-Cola ( KO). Our buy rating for Coca-Cola FEMSA has not changed since November 2004. In February, the company announced that it achieved record-breaking volume, revenue, and EBITDA in fiscal 2007, with Mexican operations recording their best-ever quarter in the fourth quarter. Revenue rose 19% year over year. Net income increased 25% when compared with the fourth quarter of 2006 to $188.3 million. Earnings per share improved 26% in the same period, continuing a pattern of positive growth over the past two years. Finally, the stock has surged 64% in the past year. While almost any stock can fall in a broad market decline, we feel that Coca-Cola FEMSA should continue to move higher. During the fourth quarter, Coca-Cola FEMSA and Coca-Cola successfully acquired Jugos del Valle and are currently in the process of integrating other Coca-Cola bottlers into the joint venture. Coca-Cola FEMSA has begun distributing Jugos del Valle's juice products in some of its Mexican market territories. American Ecology ( ECOL), which also appeared in our Top Five Small-Cap Stocks list on March 28, is one of the nation's oldest providers of radioactive, hazardous and industrial waste management services. The company's customers are commercial and government entities such as nuclear power plants, medical and academic institutions, steel mills, refineries and chemical production facilities. A significant portion of the company's revenue from operating disposal facilities -- those that actively receive and treat waste materials -- comes from discrete, one-time cleanup projects, which may span weeks, months or years, depending on project scope. American Ecology's Non-Operating Disposal Facilities segment consists of facilities that no longer receive waste materials but continue to be monitored and maintained as part of the treatment of previously received waste materials. Other services include such services as waste stabilization, encapsulation and chemical oxidation.
We have rated American Ecology a buy since October 2005. Strengths such as revenue growth, a largely solid financial position and good cash flow from operations influenced this rating. For the fourth quarter, American Ecology's revenue rose 21% year over year. This growth appears to have trickled down the bottom line, improving earnings per share by 29% from the year-ago quarter. In fact, the company has demonstrated a pattern of positive EPS growth over the past two years. A slight improvement in return on equity can be seen as a modest strength for the company. Finally, while total debt has increased slightly year over year, it is still at an almost-negligible level. We feel that American Ecology's strengths outweigh its low profit margins. Furthermore, the market expects an improvement in full-year EPS to $1.20 in fiscal 2008 vs. $1.07 in 2007. Finally, the stock has surged 29% over the past year, and while almost any stock can fall in a broad market decline, we think that American Ecology should continue to move higher despite its very nice gain. 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.