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, all-around-value stocks are in the spotlight.These are stocks of companies that meet a number of criteria, including annual revenue of more than $500 million, lower-than-average valuations such as a price-to-sales ratio of less than 2, and leverage that is less than 49% of total capital. In addition, they must 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. Silgan Holdings ( SLGN) manufactures metal and plastic consumer goods packaging products, including metal food containers, vacuum closures for food and beverage products, and high density polyethylene and polyethylene terephthalate containers for the personal care market. Our buy rating for this stock has been in place since May 2004. The rating is based on such strengths as the company's growth, efficiency, and total return. For the fourth quarter of fiscal 2008, Silgan reported slight revenue growth of 8.4% year over year. This growth appears to have helped boost earnings per share, which improved 23.1% when compared to the same quarter a year ago, continuing a trend of positive EPS growth. We feel that this trend should continue. Net income also increased in the fourth quarter, rising 22.3% from $19.9 million to $24.4 million. A slight increase in return on equity can be seen as a modest strength for the organization, and the stock's price has risen over the past year, reflecting earnings growth and other positive factors.
Management announced that both fourth quarter and full year earnings were records for the company. Looking ahead to fiscal 2009, the company anticipates adjusted net income per diluted share in the range of $3.75 to $3.95 for the full year. Although the company has shown generally poor debt management, we feel that the strengths indicated here outweigh any weaknesses and justify the stock's high price. American Italian Pasta ( AIPC) produces and markets dry pasta in North America. We have rated the company a buy since November 2008 based on its growth and solid stock performance. For the first quarter of fiscal 2009, the company reported very impressive revenue growth of 53.2% year over year, greatly exceeding the industry average of 1.8%. The growth helped boost EPS, which improved significantly from 7 cents to $1.23. American Italian Pasta has demonstrated a pattern of positive EPS growth over the past two years, and we expect this trend to continue. Net income also increased significantly, rising 1,767.1% when compared to the same quarter last year, rising from $1.4 million to $26 million. An additional sign of strength for the company is its increasing return on equity, which improved from1.8% a year ago to 18.9% in the most recent quarter. Management credited AIPC's growth strategy for the company's financial success in the first quarter. The company shows low profit margins, but we feel that the strengths detailed above outweigh any weaknesses at this time. In addition, the stock price has risen 1657.14% over the past year, and we feel that the stock still has upside potential under most market conditions.
Sunoco Logistics Partners ( SXL) engages in the transport, terminalling, and storage of refined products and crude oil, as well as the purchase and sale of crude oil in the United States. The company has been rated a buy since August 2007. This recommendation is based on the partnership's earnings growth, helped by higher operating revenue from select business segments. For the fourth quarter of fiscal 2008, the company's revenue fell 30.4% year over year, underperforming in comparison to the industry average. However, Sunoco Logistics was able to report increased operating revenue from Eastern Pipeline System, which was driven 15.1% higher by the acquisition of the MagTex refined product pipeline and higher fees across its refined product and crude oil pipelines. Terminal Facilities operating revenue also grew 14.9% to $43.1 million, driven by increased terminal fees, additional tankage at the Nederland terminal, and improved refined product additive revenue. The MagTex acquisition also helped increase earnings, which improved 110.4% in the fourth quarter. Sunoco Logistics reported net income of $75.3 million and EPS improvement from 94 cents to $1.62 per share. Return on equity also improved greatly in the fourth quarter, which can be considered another significant strength for the organization. Management stated that record fourth quarter results showed the company's ability to take advantage of market opportunities in a difficult climate. By most measures that we evaluated, the company has had relatively poor debt management, and a weak cash position is a further area of concern. Any decline in crude prices or volume could potentially hurt revenue in the future. However, we feel that the strengths cited here outweigh any weaknesses at the current time.
Medco Health Solutions ( MHS) is one of the nation's largest pharmacy benefit managers, providing sophisticated traditional and specialty pharmacy benefit programs and services for clients, members of client-funded benefit plans, and individual patients. We upgraded Medco to a buy rating in December 2008, based on such strengths as its growth, efficiency, and solvency. The company reported its results for the fourth quarter of fiscal 2008 on Feb. 24. The company reported revenue growth of 15% year over year in the third quarter, boosted in part by record specialty pharmacy revenue of over $2 billion. This growth appears to have helped boost EPS, which improved 48.7% when compared to the same quarter a year ago. Net income also increased, rising 37.7% from $214.9 million to $295.7 million over the past year. We are encouraged by a trend of positive EPS growth over the past two years. Net operating cash flow surged 327.3% in the third quarter. In addition, a debt-to-equity ratio of 0.8 implies that Medco has been somewhat successful at managing its debt levels, although a relatively weak quick ratio of 0.8 shows the potential for future liquidity problems. The company reaffirmed its guidance for full-year 2008, including GAAP diluted EPS of $2.10 to $2.13 and diluted EPS of $2.30 to $2.33. For full-year 2009, Medco anticipates diluted EPS in the range of $2.67 to $2.77. The stock itself has had lackluster performance recently, but we feel that the strengths detailed above outweigh this weakness. Advance Auto Parts ( AAP) is a retailer of automotive parts, accessories, and maintenance items in the automotive aftermarket industry. We upgraded the company's stock to a buy on March 12, based on the company's strong revenue growth and improving cash position.
For the fourth quarter of fiscal 2008, the company reported revenue growth of 13.7% year over year, which slightly outpaced the industry average of 12.8%. This growth was helped by comparable store sales growth of 3%, the net addition of 107 new stores, and an additional week of business. Additionally, revenue per store improved, with sales per square foot of store space improving marginally from $207 to $208 on a comparable 12-week basis. Advanced Auto Parts also has a healthy cash position, as indicated by a 214% surge in net operating cash flow when compared to a year ago. Lower leverage can also be seen as an advantage for the company, as decreasing total debt and improving shareholder equity resulted in a debt-to-equity ratio of 0.6, which indicates effective debt management. Deteriorating profit margins led to a decline in earnings during the fourth quarter, and this could be a cause for concern going forward. However, management stated that it was impressed with the company's performance in 2008, seeing it as a good start to the company's transformation and turnaround. Looking ahead to fiscal 2009, Advance Auto Parts anticipates a double-digit addition increase in Commercial comparable store sales. 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.