Each business day, TheStreet.com Ratings compiles a list of the top five stocks in one of five categories -- fast-growth, all-around value, large-cap, mid-cap or small-cap -- based on data from the close of the previous trading session. Today, small-cap stocks are in the spotlight.These are stocks of companies that have market capitalizations of between $50 million and $500 million 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. Diamond Foods ( DMND) processes and markets culinary, snack, in-shell, and ingredient nuts. We upgraded Diamond Foods from a hold to a buy in July 2008 on the basis of the company's impressive record of earnings per share growth, increases in revenue and net income and largely solid financial position. For the fourth quarter of fiscal 2008, the company reported that its revenue increased slightly, rising 0.6% year over year. However, net income grew significantly, surging 240.3% from 77 cents million in the fourth quarter of fiscal 2007 to $2.63 million in the most recent quarter. EPS improved from 5 cents to 16 cents, and we feel that the company should be able to continue its trend of positive EPS growth seen in the past year. Diamond has a very low debt-to-equity ratio of 0.14, which implies that the company has successfully managed its debt levels. In addition, the company appears to be able to avoid any short-term cash problems. During the quarter, the company took steps to place its snack business in a better position in the market by introducing new products and adding new distribution in key markets. As a result, snack sales improved 3%, finishing the year 11% higher than full-year fiscal 2007 results. Culinary sales grew 39% in the quarter and 1% for the full year compared to last year.