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NEW YORK -- Each business day, TheStreet.com publishes a list of the top five stocks. Yesterday, all-around-value stocks were in the spotlight with Hess, Chevron Texaco and ConocoPhillips assuming three of the top spots.
In order to be eligible for this distinction, companies must 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 two, and leverage that is less than 49 percent of total capital.
Hess Corp., a global independent energy company operating roughly 1,250 retail facilities in the eastern U.S., along with a convenience store network, has been rated a "buy" by TheStreet.com since August 2004 because of a variety of strengths.
"Propelled by price increases for natural gas, natural gas liquids, and oil, the company's total revenue and non-operating income for the first quarter of fiscal 2008 rose 45 percent year over year. An increase in the company's average daily production of natural gas and crude oil also contributed to the improvement in total revenue and non-operating income," reported the Web site.
Other variables in the plus column were Hess's first-quarter net income, which more than doubled to $759 million from $370 million a year ago, and the significant increase in net operating income in the first quarter, rising 84 percent when compared with the same quarter last year.
The No. 2 pick is Chevron Corp., one of the world's largest integrated energy companies. The company has been rated a "buy" since October 2003. TheStreet.com reported that for the first quarter of fiscal 2008, Chevron's revenue rose 40 percent year over year, and reported a net income of $5.17 billion. This represented a 9.6 percent increase in net income, while earnings per share improved 14 percent when compared with the same quarter one year ago. Additionally, the Web site reported that net sales for the quarter were boosted by higher prices for crude oil, natural gas and refined products, growing to $64.66 billion from $46.30 billion a year ago.
Rounding out the list at No. 5, ConocoPhillips rated a "buy" since April 2003. "The company displayed impressive financial performance in the most recently concluded quarter, benefiting from rising oil prices," reported TheStreet.com. In the first quarter of fiscal 2008, revenue increased by 36 percent year over year. Net income also increased 17 percent to $4.14 billion.
"We believe that the company's strategic growth initiatives and strong fundamentals should help it continue this kind of positive financial performance in the future," the Web site noted.
While TheStreet.com stands by its picks, it stated the following disclaimer, which underscores current haphazard economic conditions. "Bear in mind, however, that crude oil and natural gas prices are highly volatile and cyclical in nature. A downturn from the currently high pricing trends could affect the future profitability of the company, as could further slowdown of the U.S. economy."