David Peltier will be on Stockpickr Answers on June 26 to respond to investing and trading questions posed by members of the Stockpickr community. Not a member? Join the Stockpickr community today -- for free. TSC Ratings TheStreet.com Ratings provides exclusive stock, ETF and mutual fund recommendations using proprietary tools. Our "safety-first" approach aims to reduce risk while achieving performance on a total return basis. Each business day, we compile a list of the top five stocks in one of five categories -- fast-growth, all-around value, large-cap, mid-cap and small-cap. Today, small-cap stocks are in the spotlight. These companies have market capitalizations between $50 million and $500 million and receive "buy"-ratings from our proprietary quantitative model, which considers more than 60 factors. They are ordered by their potential to appreciate. Hawkins ( HWKN) blends and distributes bulk and specialty chemicals for water treatment and industrial and pharmaceutical use. We have rated Hawkins buy since January 2003.
Fiscal first-quarter revenue declined 7% year over year to $53 million as net income increased 31% to $6.1 million and EPS jumped 28% to 32 cents. Gross, operating and net margin ascended 748, 455 and 335 basis points to 35%, 18% and 12%, respectively. Return on assets increased 196 basis points to 13% while return on equity shed 72 basis points to 17%. The company has $19 million of cash and cash equivalents and a quick ratio of 1.82, indicating a strong liquidity position. A debt-to-equity ratio of .08 indicates ideal capital structure. Shares of Balchem have fallen 3% in 2009, in line with the Dow Jones Industrial Average. But the stock trades at a price-to-earnings ratio of 22, indicating a sizable premium to the market and a modest premium to the average peer in the specialty chemicals industry. The stock offers a weak .45% dividend yield. Village Super Market ( VLGEA) operates a chain of ShopRite supermarkets in the United States. We upgraded Village Super Market to buy on Dec. 5, 2006. Fiscal third-quarter revenue increased 7% year over year to $293 million as EPS climbed 27% to 47 cents. Same-store sales, an important gauge of year-over-year improvement, jumped more than 7%. The company has a modest $36 million debt-load and over $47 million of cash. Shares of Village Super Market have enjoyed a 7% climb in 2009 and are up 17% from their March low. The stock trades at a price to earnings ratio of 17, representing a premium to the market, and offers a lackluster 2.8% dividend yield.
Diamond Foods ( DMND) processes and markets culinary, snack, in-shell and ingredient nuts that are sold through two main product lines: Diamond of California and Emerald Nuts. We upgraded Diamond to buy in April. Fiscal third-quarter revenue ascended 11% year over year to $111 million as net income increased 144% to $2.7 million and EPS improved 128% to 16 cents, establishing an eight quarter streak of growth. Gross, operating and net margin increased 837, 336 and 133 basis points to 27%, 5.5% and 2.4%, respectively. Return on assets increased 43 basis points to 5.4% and return on equity improved 406 basis points to 13%. Just $1.5 million of cash and a quick ratio of .33 indicate a weak liquidity position. But a debt-to-equity ratio of .74 indicates conservative leverage. Shares of Diamond have climbed 35% in 2009, outperforming the Dow Jones Industrial Average and the S&P 500. The stock trades at a price-to-earnings ratio around 20, indicating a premium to the market and average peer in the packaged food and meats industry. The stock offers a weak dividend yield of .66%. Tompkins Financial ( TMP) is the parent of three community banks: Tompkins Trust Company, The Bank of Castile and Mahopac National Bank, which offer commercial banking services to individuals and businesses throughout New York state. We have rated Tompkins Financial buy since October 2007. Fiscal first-quarter revenue increased 3% year over year to $47 million as net income climbed 3% to $7.7 million and EPS improved 3% to 79 cents. Gross and operating margin increased 526 and 294 basis points to 74% and 37%, respectively, as net margin declined a marginal 5 basis points to 16%. Return on assets eroded 15 basis points to 1% and return on equity shed ten basis points to 13%.
Shares of Tompkins have declined 18% in 2009, underperforming the Dow Jones Industrial Average and the S&P 500, but are up 44% from their March low. The stock trades at a price-to-earnings ratio around 15, which is in-line with the market and offers a 2.87% dividend yield. TSC Ratings was recently given an award for "Best Stock Selection" amongst independent research providers by BNY ConvergEx Group. To see how your portfolio can utilize our research, click here. A rating can be viewed for any stock through our screener stock rating screener. Each rating is derived from a variety of fundamental and pricing figures and represents our opinion of risk-adjusted performance relative to a 5,000+ stock coverage universe. However, the rating does not incorporate all factors that can alter a stock's performance, such as corporate or industry events, technology innovations and shifts in competitive dynamics.