SEE IF YOU

can guess which New York-based clothier's Web site this quote is taken from:

Over the Company's forty-seven year heritage we have become a well-known resource for quality suits, separates, dresses, shoes and accessories with a feminine, polished approach to updated classic style. The Company meets the needs of modern women's busy lifestyles by providing a full range of career, casual and occasion offerings in one location.

We'll tell you the answer in a moment, since this classy retailer also has some snappy looking shares that recently turned up on our midcap screen.

The "cap" in midcap refers, of course, to market capitalization, or a company's share price multiplied by its outstanding-share count. Just what constitutes a midcap vs. a large- or small-cap is a matter of opinion, but we generally regard the $1 billion to $5 billion market-cap range as being medium-sized.

A look at Standard & Poor's index data shows that its Midcap 400 index has returned an average of 13.11% over the past 10 years. That outpaced by far its larger-company 500 index's 10.08%, and even its Small Cap 600's 10.83%.

Smaller companies offer higher potential returns, but they also come with greater risk of failure. We think midcap stocks present a nice balance of growth potential and stability.

How have our past midcap recommendations fared? Funny you should ask. We've got a nifty table showing just that.

We recently set out to uncover more medium-sized opportunities using our stock-screening tool. We lopped the large and small caps off of our 8,300-company database, leaving 1,066 middlings. Overpriced shares got a swift kick in the fundamentals when we eliminated all but those with below-average trailing price/earnings ratios and above-average earnings-growth rates. Debt had to be manageable, and candidates had to have average analyst recommendations of Buy or Strong Buy the sort of giddiness growth stocks should attract.

See our recipe on the top right of this page for details on all of our criteria. Our search dug up 15 names.

Ann Taylor
Ann Taylor operates more than 600 stores under the names Ann Taylor, which targets the "successful, relatively affluent career woman," and Ann Taylor Loft, for "value-conscious women with a more relaxed lifestyle both at work and at home." Sales for 2002 were more successful than relaxed, totaling $1.38 billion.

Industry watchers say Ann Taylor products cost a few dollars more than other brands, but have classic styling that stays in fashion longer, making them a good value over time. A sluggish spring, though, led some to wonder if those classic styles had strayed from conservative to boring.

The company announced last Friday it was replacing its senior vice president of design, and according to First Albany analyst Harry Ikenson, the fall assortment looks sharp. "At Ann Taylor Stores we noticed significant improvements in fabrications, style and color," wrote Ikenson in a Sept. 18 research note. Given that and strong fall marketing initiatives, he says, the company could be in for a solid second half. (Ikenson doesn't own shares of Ann Taylor; First Albany doesn't have an investment-banking relationship with the company.)

The Reuters Research earnings consensus for 2003 has been ratcheted up to $1.86 from $1.79 during the past two months, thanks to a stellar Aug. 13 second-quarter report. Earnings of $21.2 million were up 16% year-over-year on revenues of $390.2 million, up 14%. Sales at stores open at least a year were up 4.9%.

And Ann Taylor's new products appear to be off to a great start. Same-store sales for August, reported Sept. 4, rose 8.2%.

The stock has nearly doubled since hitting a March low of $17.05. Yet with the newly increased earnings expectations, it still appears, shall we say, Loft-priced. Its current P/E of 18 is below the apparel-retailer average of 22. And Ann Taylor is projected to increase its earnings by 15% annually over the next five years, a touch faster than peers' 14%. That makes for a price/earnings-growth, or PEG, ratio of 1.1, less than the group's 1.6 or the S&P 500's 1.8.

SkyWest
Relentless price competition, volatile fuel prices and generally lousy relationships between management and labor those were the good old days for airlines. After Sept. 11, things got really rough. So why look at St. George, Utah-based regional airline SkyWest, which has agreements to fly shorter routes for with Delta and (gulp) Chapter 11 operator United Airlines?

The company's new deal with United was the first one approved by the bankruptcy court under which United now operates. It's an 11-year contract that calls for SkyWest to double its fleet size in the first five years to provide short flights under the United Express name. "We believe this agreement is unprecedented in our industry and offers us significant long-term growth opportunities that will greatly benefit SkyWest and our shareholders," said beaming Chief Financial Officer Bradford Rich in the press release announcing the deal.

SkyWest trades at 18 times 2003 earnings and those earnings are projected to increase by 15.5% annually over the next five years. That's a PEG of 1.2. How does that compare with industry averages? It doesn't, because the industry, on average, isn't profitable. But it's quite a bit cheaper than peers Southwest Airlines, with a P/E of 47 and a PEG of 3.2, and Jet Blue, with a P/E of 43 and a PEG of 1.7.

For a list of all our screen survivors, click here.