American Physicians Service Group ( AMPH) is an insurance and financial services firm. Its subsidiaries and affiliates provide medical malpractice insurance, as well as brokerage and investment services to institutions and high net worth individuals. American Physicians Service has been rated a buy since May 2003. This rating is supported by several positive factors, including its largely solid financial position and expanding profit margins. For the first quarter of fiscal 2009, APS reported a slight drop in revenue, but this does not appear to have hurt the company's bottom line, as earnings per share (EPS) improved 45.6%. The company has reported somewhat volatile earnings recently, but we feel that it is poised for EPS growth in the coming year. The company's net income also increased significantly in the first quarter, rising 39.9% when compared to the prior year's quarter. Its gross profit margin increased since the first quarter of last year, and we consider it to be strong at 43.90%. Management was pleased to see its momentum from fiscal 2008 continue into fiscal 2009, and expects to see continued progress as the year continues. Although the company may harbor some minor weaknesses, we do not feel that they are likely to have a significant impact on future results. Pervasive Software ( PVSW) provides embeddable data management and integration software products to customers worldwide. The stock has been rated a buy since April 2008. This rating is driven by a few notable strengths, including the company's solvency, attractive valuation levels, and growth in revenue and net income.