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Top five fast-growth large-cap stocks

Large-cap companies are applauded often for safety but rarely for growth. Here are five buy-rated companies with exceptional growth rates and cheap shares. Analysts expect these companies, which have market capitalizations in excess of $5-billion (U.S.), to increase profit by at least 12 per cent in the coming year.

5. Apple is a leading smart-phone maker.



The Numbers: Net operating cash flow has significantly increased by 177% to $2,330-million compared with the same quarter last year. In addition, Apple has also vastly surpassed the industry average cash flow growth rate of 69.7%. The gross profit margin for Apple is 43.3%, which we consider to be strong, and it has increased from the same quarter the previous year. Along with this, the net profit margin of 22.8% is above that of the industry average.

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The Stock: Apple is riding the product cycle wave, with the new iPhone 4G expected to build on strong iPad sales. Apple shares rose 78.6% during the past year, blowing away the major U.S. indices. The stock trades at a price-to-earnings ratio of 21, on par with its high-tech peers. Apple doesn't pay dividends.



4. O'Reilly Automotive retails automotive aftermarket parts, equipment and other supplies.



The Numbers: The net income growth from the same quarter one year ago has significantly exceeded that of the specialty retail industry average. The net income increased by 55.1% when compared with the same quarter one year prior, rising from $62.84-million to $97.48-million. O'Reilly Automotive increased its bottom line by earning $2.23 per share, vs. $1.51 in the prior year. This year, the market expects an improvement in earnings to $2.75 a share.



The Stock: O'Reilly surged by 32.15% over the past year, outperforming the rise in the S&P 500 index during the same period. The stock trades at a price-to-earnings ratio of 20, similar to its specialty retail peers. The shares do not offer a dividend.

3. Express Scripts provides a range of pharmacy benefit management services in North America.

The Numbers: Express Scripts' very impressive revenue growth greatly exceeded the industry average of 10.2%. Since the same quarter one year prior, revenue leaped by 106%, and this growth appears to have trickled down to the company's bottom line, improving the earnings per share by 9.3% in the most recent quarter compared with the same quarter a year ago.



The Stock: Express Scripts advanced 67% during the past year. The stock trades at a price-to-earnings ratio of 33, a premium to its health care provider peers. The shares do not pay a dividend.

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2. Dollar Tree operates discount variety stores selling items for $1.

The Numbers: The gross profit margin for Dollar Tree is 38%, which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 4.7% is above that of the industry average. During the past fiscal year, Dollar Tree increased its bottom line by earning $3.57 a share vs. $2.52 in the prior year. This year, the market expects an improvement in earnings to $4.45 a share.



The Stock: Dollar Tree climbed 42% during the past year. The stock trades at a price-to-earnings ratio of 12.5, a discount to its multi-line retail peers, which sell at an average ratio of 21. Dollar Tree shares have a dividend yield of zero.



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1. Novo Nordisk develops drugs for diabetes care as well as other biopharmaceuticals targeted to other diseases.

The Numbers: The gross profit margin for Novo Nordisk is currently very high, coming in at 80.6%, and increase from the same quarter the previous year. Along with this, the net profit margin of 23.9% is above that of the industry average. Novo Nordisk has improved earnings per share by 29.1% in the most-recent quarter compared with the same quarter a year ago. The company has demonstrated a pattern of positive earnings-per-share growth over the past two years, a trend we feel should continue. During the past fiscal year, Novo Nordisk increased its bottom line by earning $3.43 a share, vs. $2.89 in the prior year. This year, the market expects an improvement in earnings to $3.90 a share.



The Stock: Novo Nordisk climbed 55% during the past year, bringing its price-to-earnings ratio to 21, a premium to pharmaceutical industry peers. The shares offer a 1.26% dividend yield.

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