British Petroleum (BP) #1 [9]

BP p.l.c. is an oil company with four main businesses:
Exploration and Production, Gas, Power and Renewables, Refining
and Marketing, and Petrochemicals. Exploration and Production
includes oil and natural gas exploration and field development
and production, together with pipeline transportation and
natural gas processing. Since 1997, BP has increased its
reserve base from 8.6 billion barrels of oil equivalent to 18.3
billion.

The company is also the largest oil company involved with
alternative sources of energy. BP is advertising itself as
Beyond Petroleum. The company is pursuing opportunities in the
growing Liquefied Natural Gas (LNG) market, and we find this
diversified strategy attractive in this environment.

BP's operating efficiencies are evident from the fact that
despite tying-up substantial amounts of capital in ongoing
development projects, it has maintained competitive returns on
capital. The company's returns should move-up, as these
projects start coming online over the next few years. Also, the
company's disciplined financial management and strong balance
sheet enable it to continue paying significant amounts to
shareholders, both through a growing dividend and through ADS
buybacks. During 2004, BP's ADS dividend increased 13% year-
over-year. Also, BP repurchased 827 million of its outstanding
ADS, for a total of $7.5 billion. Given our outlook for stable
outlays and leverage already within management's targeted
range, prospects remain positive for continued capital returns
to shareholders.

Additionally, we like the solid 3% dividend yield on BP.
Management is shareholder-friendly and vows to return 100% of
free cash flows to investors as long as crude oil stays above
$20 a barrel. With crude oil flirting with $60 a barrel, cash
flows to investors should be quite ample for as far as the eye
can see. The diversified nature of their business and their
emphasis on alternative sources of energy draw us to the stock.

As with every other energy company, BP is enjoying the fruits
of record-high oil prices. With crude prices around $65 a
barrel, the company is minting money and throwing off large
amounts of cash flows back to shareholders. Analysts have been
raising their estimates in earnest over the past three months.
Over that time period, estimates for the year ending December
2005 have increased almost 15% to $6.55. This is even more
impressive when you consider the sheer size of the company. It
seems apparent that crude oil will remain elevated for the
foreseeable future, which means estimates for the future are
bound to go up as well.

Marvell Technology Group Ltd. (MRVL) #1 [?]

Marvell Technology Group designs and develops analog and mixed
signal components as well as digital signal processors for the
storage and networking markets. The company's goal is to
provide for increased bandwidth as communication solutions
evolve. It achieves this with state-of-the-art chip solutions
that enable data transfer in data storage devices and
networking applications. Incorporated in Bermuda with U.S.
headquarters in Sunnyvale, CA, MRVL designs and develops
semiconductor solutions that enable consumers to store and move
digital data at high speeds and low error rates.

Marvell has been on a meteoric growth path over the past
several years. Sales are up more than tenfold since 2000, with
sales growth averaging 120% since then. This blistering pace
will likely slow to a still-strong 20%-25% clip over the next
several years.

Often times with high-growth technology companies, there are
struggles with debt and balance sheet issues. This is not the
case with Marvell. Their debt-free balance sheet is in superb
financial shape, with more than $500 million in cash and
investments. The firm continues to bolster its financial
stability by consistently generating positive free cash flow.

The company targets top equipment makers in the enterprise
storage and networking markets with its broad spectrum of
integrated circuits. Marvell leverages its ability to
incorporate high levels of integration into a single-chip
solution to tap new markets. Outsourcing chip production
contributes to a relatively lean cost structure, which in turn
increases profitability.

The company reported a strong earnings report for its fiscal
year 2006 second-quarter. Earnings came in at 31 cents per
share, two cents ahead of the consensus estimate and well ahead
of last year's 20 cents. They also lifted their future guidance,
which caused a nice pop in the stock. Management said that
their networking and mobile HDD segments performed extremely
well during the quarter.

The stock is currently trading around 29x next year's estimates
of $1.55 per share. This is slightly above the long-term growth
rate of 26.33%, giving the stock a PEG ratio of about 1.1. This
is certainly not unreasonable for a company with such great
earnings momentum and future prospects.

Cummins Inc. (CMI) #1 [5]

Cummins, Inc. engages in the design, manufacture, distribution,
and servicing of diesel and natural gas engines, electric power
generation systems, and engine-related products. It operates in
four segments: Engine, Power Generation, Filtration and Other,
and International Distribution. The Engine segment manufactures
and markets a range of diesel and natural gas-powered engines
for the heavy and medium duty truck, bus, recreational vehicle,
light-duty automotive, agricultural, construction, mining,
marine, oil and gas, rail, and governmental equipment markets.
It offers a variety of engine products with displacement from
1.4 to 91 liters and horsepower ranging from 31 to 3,500. The
Power Generation segment provides electric generators; power
systems; and related accessories, components, and services.
These products include diesel and gas generators used in
recreational vehicles, commercial vehicles, and pleasure boats,
as well as diesel and gas generator sets, transfer switches,
and switchgear used in commercial facilities for emergency back-
up and prime power.

Demand for Cummins' engines has been robust recently due to a
strong cyclical upswing in truck sales. Having purchased loads
of trucks in the late 1990s, operators are starting to update
their aging fleets. Also, operators are starting to buy trucks
in advance of 2007 emissions legislation that will increase
costs and may reduce engine performance. This is providing a
substantial, though temporary, boost to Cummins' sales.

The company reported an excellent fiscal second quarter, in
which they posted $2.83 per share, significantly ahead of the
$2.41 Zacks consensus. They also raised guidance for the full
year, going to a range of $10.10 to $10.30, up from the
previously forecasted $9 to $9.20 per share. They are seeing
strength in their engine business as sales of heavy duty truck
sales advanced by 30% due to strong domestic and international
demand. Their power generation segment also performed well,
growing by 7% to $493 million. The company has improved its
cost structure as well, enabling it to convert more of its
sales into profits.

Cummins shares are very attractively valued at about 8x their
new forecasted earnings per share for this year. Estimates have
gone up significantly over the past 90 days. Over that time
period, estimates for the year ending December 2005 have
increased from $9.10 to $10.40 per share. That is an increase
of 14.3%, which is impressive given the company's size. The
stock could experience multiple-expansion due to strong
earnings momentum.

AstraZeneca (AZN) #1 [9]

AstraZeneca (AZN) engages in the research, development,
manufacture, and marketing of prescription pharmaceuticals, as
well as the supply of healthcare services worldwide. It
provides medicines designed to fight disease in areas of
medical need, such as cancer, cardiovascular, gastrointestinal,
infection, neuroscience, and respiratory. The company recently
received FDA approval for Arimidex to be used in breast cancer
treatment.

Perhaps the strongest of all AstraZeneca drugs is Seroquel (for
schizophrenia). Seroquel continues to gain market share against
its chief competition Zyprexa (Eli Lilly), Risperdal (Johnson &
Johnson), and Geodon (Pfizer). The U.S. Food & Drug
Administration (FDA) approval the drug last year for bipolar I
disorder (recurring episodes of mania and depression), and an
increased dosing cycle approval to a 12-week regimen. We are
optimistic on future trends for Seroquel throughout 2005. The
company will likely ring up total sales of nearly $2.7 billion
in 2005, growing to over $4 billion in 2008.

Recent second quarter 2005 earnings were far above expectations.
The company posted upside of nearly $250 million in revenues.
Strong products such as Seroquel (schizophrenia), Arimidex
(breast cancer), Casodex (prostate cancer), Symbicort
(asthma/COPD), and Crestor (cholesterol) all outpaced consensus
forecasts. The company raised earnings guidance for the full
year to $2.75, well above the previous range of $2.35 - 2.50.
We see continued upside from strong drug sales flowing into the
third and fourth quarter.

AZN's valuation is attractive given the superior growth rate.
We see AstraZeneca being able to deliver a four year CAGR of
16.4%, significantly above that of all other large-cap
pharmaceuticals (ex. Schering-Plough). Strong bottom-line
growth is driven by a combination of growing revenues,
moderating operational costs and aggressive share buybacks. The
stock currently trades at 17.4x 2005 EPS.

The company is also working on reducing costs to drive
profitability beyond 2005. AZN should continue to see selling,
general and administrative (SG&A) costs decline as a percent of
total revenue for the next several years. Additionally, gross
margins should continue to expand, given the ramp in key
blockbuster products. Share buy-backs are also a significant
driver of the bottom-line. The company has $3 billion in buy-
backs authorized for the next year.

All of these factors contribute to AstraZeneca's earnings
momentum. The company has surpassed expectations for five
consecutive quarters. It's Zacks #1 Rank not only reflects the
most recent positive earnings surprise, but also the sustained
increased in earnings estimates. Analysts have raised their
full year forecasts by 9% over the past 60 days, with the
consensus estimate most recently being revised upwards by two
cents over the past seven days to $2.68 per share.