5. Xyratex ( XRTX) provides enterprise-class data storage and network technology.
For the fourth quarter of fiscal 2010 ended Nov. 30, 2010, Xyratex reported earnings of $1.02 per share, compared to earnings of 5 cents per share in the year-ago period. For the full year, the company is likely to report earnings per share of $2.26 for fiscal 2011 and $2.42 for fiscal 2012. The return-on-equity during the past 12 months has been 47.5%, surpassing competitors. EMC ( EMC), NetApp ( NTAP), SanDisk ( SNDK) and Western Digital ( WDC) have ROEs of 7.5%, 18.6%, 26.8% and 35.0%, respectively. The stock is currently trading at an attractive forward price-to-earnings multiple of 5.5 and EV-to-EBITDA ratio of 3.1. Of the eight analysts covering the stock, six recommend buying and two rate holding. Analysts polled by Bloomberg expect the stock to gain around 45% over the next 12 months with a consensus target price of $19.3.