Each business day, TheStreet.com Ratings 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 and small-cap -- 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. DeVry ( DV) is an international higher education company that operates DeVry University, Ross University, Chamberlin College of Nursing and Becker Professional Review. 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 growth, robust revenue growth, return on equity, and largely solid financial position. Soild stock price performance also contributes to the buy rating.
The company announced on Jan. 27 that its revenues rose 35% year over year in the second quarter of fiscal 2009, helped by increased revenue across segments and the acquisition of U.S. Education, which is the parent company of Apollo College and Western Career College. Revenue growth appears to have trickled down to the bottom line, as DeVry reported EPS improvement of 20.4%. Higher enrollment numbers also helped boost earnings. Net income also increased, rising to $42.9 million from $35.8 million in the second quarter of fiscal 2008. Return on equity, which improved slightly when compared to the same quarter a year ago, can be seen as a modest strength for the organization. In addition, a debt-to-equity ratio of 0.18 indicates that DeVry has successfully managed its debt levels. Management was pleased not only with DeVry's financial results in the second quarter, but also with the employment rate of its graduates. Management stated that it was remarkable in the current job market to see 92% of recent graduates employed within six months of graduation. The company continues with a conservative capital structure that it feels is appropriate to the current economic climate, although it does continue to invest in growth opportunities. Looking ahead, DeVry expects its full year 2009 capital expenditure to be in the range of $65 million to $70 million. Although the company shows low profit margins, we feel that the strengths detailed above outweigh any weaknesses at this time. Aceto ( ACET) engages in sourcing, quality assurance, regulatory support, marketing, and distribution of chemically derived pharmaceuticals, biopharmaceuticals, specialty chemicals, and crop protection products. We have rated it a buy since August 2008. Our rating is based on a variety of strengths, including the company's impressive record of EPS growth and its largely solid financial position.
For the first quarter of fiscal 2009, the company announced quarterly sales of $93.8 million, an increase of 18% year over year. With a continued focus on cost containment and a shift in business mix contributed to a close to 200 basis point expansion in gross margin to 20.18% in the most recent period versus 18.31% a year earlier. Aceto's first quarter net income rose by over 250% when compared to the same quarter a year ago. This growth in turn helped boost EPS, which improved from 5 cents in the first quarter of fiscal 2008 to 18 cents in the most recent quarter. This continued a pattern of positive EPS growth demonstrated by Aceto over the past two years. Management reported that sales growth in both the health sciences and chemicals and colorants segments (up 21.3% and 19.2% year over year, respectively) more than offset a 23.2% decrease in crop protection sales. The strength in the health sciences segment was attributed mainly to increased sales from foreign operations -- particularly in Europe -- and to increases in domestic generic and nutritional products. Sales growth in chemicals and colorants experienced good growth in pigments, dyes, and miscellaneous intermediates, as well as a boost from foreign operations, according to management. One weakness in the company's results was relatively weak operating cash flow generation. However, with a very clean balance sheet and positive working capital, we feel the positives far outweigh any negatives for the company at this time. Gilead Sciences ( GILD - Get Report) Gilead Sciences, Inc. is a biopharmaceutical company that discovers, develops and commercializes therapeutics to advance the care of patients suffering from life-threatening diseases worldwide. We upgraded it to a buy in October 2008, based on such strengths as the company's revenue growth, return on equity, solid stock price performance, and impressive record of EPS growth.
For the fourth quarter of fiscal 2008, revenue increased 30.5% year over year on higher product sales. Product sales surged 35.3%, driven by strong growth of antiviral product sales (these in turn make up the most significant portion of overall revenue for the company). Fourth quarter net income improved 41.5% when compared to the same quarter last year, primarily due to increased sales of Gilead's HIV drugs. Boosted by the improved revenue, EPS increased 46.3% in the most recent quarter, continuing a trend of positive EPS growth over the past two years. A slight improvement in return on equity makes that measure a modest strength for the organization. Looking at where the stock price is today, we see that it is not only higher than it was a year ago, but it has also outperformed the rise in the S&P 500 over the same period. The company's strong earnings growth may have been key to this performance, although other factors clearly paid a role. Although the company may harbor some minor weaknesses, we feel that they are unlikely to significantly impact future results and therefore consider this stock as having good upside potential in most market conditions. ManTech International ( MANT - Get Report) provides technologies and solutions for mission-critical national security programs for the intelligence community, the space community, and various departments and agencies of the U.S. federal government. ManTech has been rated a buy since March 2005. Our rating is based on strengths such as the company's robust revenue growth, largely solid financial position, and record of EPS growth.
For the third quarter of fiscal 2008, revenue rose by 26.8% year over year. This increase was primarily the result of a business strategy focused on high-end defense and intelligence markets supporting U.S. national security. Revenue growth appears to have helped boost earnings per share, which improved 31.4% when compared to the same quarter a year ago. The EPS increase from 51 cents to 67 cents represents the continuation of a pattern of positive EPS growth demonstrated by ManTech over the past two years, a trend which we feel should continue. Net income also increased in the third quarter, rising from $17.48 million in the third quarter of fiscal 2007 to $23.86 million in the most recent quarter. ManTech's very low debt-to-equity ratio of 0.007 and quick ratio of 1.42 illustrate the company's successful management of debt levels and ability to avoid short-term cash problems. Management announced it was pleased with the third quarter results, as strong performance and excellent cash flow helped provide necessary flexibility in a challenging economic environment. Based on strong business momentum in its national security and defense business, the company set EPS guidance at $0.67 to $0.70 for the fourth quarter and $2.53 to $2.56 for full-year fiscal 2008. These ranges represent 10% to 15% growth over the fourth quarter of fiscal 2007 and 30% to 31% growth over full-year fiscal 2007. The company currently shows low profit margins, but we feel that the strengths detailed above outweigh any potential weakness. NCI ( NCIT) is a provider of information technology (IT) services and solutions to U.S. federal government agencies. The company focuses on designing, implementing, maintaining, and upgrading IT systems and networks. NCI has been rated a buy since February 2008 based on its healthy growth in revenue and net income, solid stock price performance, impressive record of EPS growth, and return on equity.
For the third quarter of fiscal 2008, the company reported revenue growth of 18.7% year-over-year. This growth represents record revenue results for the company, and appears to have trickled down to NCI's bottom line, improving EPS by 28%. EPS increased from 25 cents in the third quarter of fiscal 2007 to 32 cents in the most recent quarter. Net income also increased, rising 31.6% from $3.34 million to $4.40 million. Return on equity improved slightly from 16.2% to 16.6%. NCI's strong earnings growth has helped the stock price climb higher over the past year. Management announced that it was pleased with what it considered excellent quarterly results and considers NCI well-placed in its markets and with its customers for fiscal 2009. The company is confident about its business model and plans to continue with its strategic plan of focusing on organic growth supplemented with strategic acquisitions that generate long-term, sustainable value. While an overall down market can negatively affect any stock, we feel that the company has good upside potential in any other market, despite the fact that it has already risen in the past year. In addition, we believe that the strengths detailed above outweigh the fact that the company shows low profit margins. Our quantitative rating, which can be viewed for any stock through our stock screener stock rating screener, 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.