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 we focus on mid-caps. These are stocks of companies that have market capitalizations of between $500 million and $10 billion that 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. DeVry ( DV) is an international higher education company that operates DeVry University, Ross University, Chamberlin College of Nursing and Becker Professional Review. DeVry University offers career-oriented undergraduate and graduate programs in technology, business and management. Classes are offered at a number of locations, as well as through DeVry University Online. Ross University is one of the largest medical and veterinary schools in the world. The basic curriculum is taught at campuses in Dominica and St. Kitts/Nevis, while clinical rotations are carried out at teaching hospitals and veterinary schools throughout the United States. Chamberlin College of Nursing, previously known as Deaconess College of Nursing is a national nursing school, while Becker Professional Review provides professional education to clients in accounting and finance-related professions.
The company has been rated a buy since January 2007. DeVry's strengths can be seen in a variety of areas, such as its impressive record of earnings-per-share (EPS) growth, compelling growth in net income, revenue growth and largely solid financial position. For the third quarter of fiscal 2008, DeVry reported EPS of 53 cents, compared to 32 cents one year prior. This increase continues the company's demonstrated pattern of EPS growth over the past two years, a trend that we feel should continue. The company's third-quarter net income of $38.32 million represents an increase of 67.2% when compared to the same quarter last year. DeVry also has no debt to speak of, and its revenue rose by 18.4% in the second quarter. In other developments, the company disclosed on May 19 that federal investigators have launched an investigation into the company's recruitment practices, and that management is cooperating fully with this probe. While we believe the stock is a strong one based on its quantitative merits, this is a situation that bears watching. Circor ( CIR) has been manufacturing an array of valves since the early 1900s. Valves range in application from generic products for heating and cooling to more specialized steam catapult valves on nuclear-powered aircraft carriers and cryogenic valves used in the space shuttle. The company also designs, makes and distributes a variety of related products, such as fittings, actuators, condensate pumps, flow meters and water heaters and provides a range of services to assist customers in the installation and maintenance of fluid-control systems. Circor operates 16 manufacturing facilities in the U.S., Canada, Western Europe and China and services more than 12,000 customers in over 119 countries.
Circor has been rated a buy since November 2004. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth and solid stock price performance. Earnings per share grew 69% for the first quarter of fiscal year 2008 when compared to the same quarter of fiscal 2007, which brought its three-year average EPS growth rate to a solid 48%. The company reported 9.5% growth in its revenue over the same period, which trailed its industry average but allowed it to boost net income, which grew 74% for the interim. In addition, as of the market's close on May 20 of this year, Circor's share price has jumped 39% compared to its closing price of one year prior. The stock currently trades at a valuation level that is in line with its peer average and a discount to the S&P 500 average. We feel that the company's strengths outweigh the fact that Circor sports a relatively low operating profit margin, at 11% for the quarter just ended. In its release reporting first-quarter results, the company indicated that its orders grew 27% year over year on the back of strength in its naval, aerospace and energy markets. Its backlog jumped 45% from the year-ago quarter. Management is guiding investors to expect EPS for the second quarter in the range of 74 cents to 83 cents, excluding special charges. This compares to 60 cents earned for the second quarter of fiscal 2007.
Gorman-Rupp ( GRC) designs, manufactures and sells pumps and related equipment for use in various liquid-handling applications, such as wells, wastewater, agricultural systems, fire protection and military uses. The company's pumps have a variety of uses, from pumping refined petroleum products for fueling aircraft and water for fire fighting to ice cube dispensing equipment and office copy machines. Our buy rating on Gorman-Rupp has not changed since November 2005. The company's strengths can be seen in multiple areas, such as its revenue and net income growth, largely solid financial position and impressive record of earnings per share growth. Revenue for the first quarter of fiscal 2008 rose 9.4% year over year. The company's first-quarter net income of $7.15 million represents a 41% increase from the $5.09 million reported one year ago. As a result, the company was able to report record EPS of 43 cents, representing an improvement 41% from 30 cents per share a year ago. This adds to the company's trend of positive EPS growth over the past two years. Finally, with no debt to speak of, Gorman-Rupp has a debt-to-equity ratio of zero. Management was pleased with what it considers to be a very good start to a year in which Gorman-Rupp will celebrate its seventy-fifth anniversary. The company reported that it will continue to grow in the areas of water and wastewater handling and infrastructure renewals and expansion. Consolidation and expansion of the company's Mansfield, Ohio, facilities is expected to result in increased efficiency and capacity in the future. Bear in mind, however, that the machinery industry as a whole faces challenges from rising commodity costs. Customers have historically absorbed the commodity increases as surcharges that have helped cover the difference, but there is no guarantee that this will continue.
Energen Corporation ( EGN) is an energy holding company that engages in the acquisition, development, exploration and production of oil, natural gas and natural gas liquids in the United States. The company has two subsidiaries, Energen Resources Corporation and Alabama Gas Corporation. Energen Resources, which explores for and produces oil and gas, generates about 85% of the company's consolidated net income. Alabama Gas Corporation is the largest natural gas distributor in Alabama. Energen is based in Birmingham, Ala. Energen has been rated a buy since January 2006. A number of positive investment measures should help this stock outperform the majority of stocks that we rate. Energen's revenue increased slightly in the first quarter of fiscal 2008, rising 5.9% year over year. This growth appears to have helped boost the company's earnings per share by 12.5% year over year. In addition, net income improved, rising 12% from $103.88 million a year ago to $116.69 million in the first quarter. Energen's expanding profit margins are also strengths, as the company reported that its gross profit margin increased to 45.60%, compared to 42.87% in first quarter of 2007. Management was pleased with the first-quarter results and is excited about Energen's future outlook. The company has capitalized on the recent upward momentum of oil and gas market prices by strengthening its hedge position for 2009 and 2010 production in order to help lock in earnings and cash flow growth. Additionally, management announced its new earnings guidance for fiscal 2008, with earnings per diluted share now estimated to be in the range of $4.15 to $4.55 due to the current market strength of commodity prices. However, any significant decline in natural gas and oil prices along with any unfavorable regulatory movements could negatively affect the company's business and future profitability.
American Ecology Corporation ( ECOL) 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 clean-up 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 a notable return on equity influenced this rating. For the first quarter of fiscal 2008, American Ecology's revenues rose by 18.6% year over year. This growth appears to have trickled down to the bottom line, improving earnings per share by 19% over the first quarter of 2007. 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 increased slightly year over year, it remains at an almost negligible level. Looking ahead, the company anticipates fiscal 2008 earnings to be in the range of $1.17 to $1.23 per diluted share. This estimate is based on the company's record first-quarter results and its strong outlook for the second quarter. Additionally, we feel that American Ecology's strengths outweigh the fact that the company currently shows weak operating cash flow.
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 impact the stock price, nor does it include recent technology developments and competitive dynamics that may affect the company.