It’s no secret that most Wall Street firms wrestle simultaneously with 1) signing up merger & acquisition customers and 2) objectively assessing the same companies that are merging.

Value Line, on the other hand, just worries about 2). Which is why the company has a cult following despite the pricey nature of its reports. Value Line likes what it sees in a small number of companies serving the pharmaceutical industry, with Covance earning a top score in the patented Value Line system.

So does Parexel International, with 5,600 employees. Says Value Line: “The favorable revenue trend should persist, as Parexel closed last year with a backlog of $1.1 billion, up 50%. This augurs well for revenue growth in the near term. Over the 3- to 5-year pull, we believe that pressure on drug and biotech companies will force them to seek the low-cost, high-quality clinical research and consulting support that Parexel offers.” The Value Line analysts estimate that 25 percent of Parexel’s business comes from its five largest clients. Perhaps a tenth of the firm’s revenues and profits are from Perceptive, its IT division, Value Line calculates.

Value Line is also cheery about eResearch Technology. The firm has been through a rough patch this year, and has been keeping a lower profile than some of its rivals. It just hired a new boss from Parexel. Value Line isn’t worried. “Even though contract delays will likely continue, we believe that bookings will remain solid and cancellations will probably be low,” Value Line says. “We think this will be aided by the global regulatory agreement last year to increase the number of cardiac safety evaluations in clinical trials. On the other hand, the electrocardiographic core laboratory market may well become more competitive as new entrants try to take advantage of the rising demand for enhanced technology and services in this arena.”