DRIP PORTFOLIO
High-Growth Companies

Drip Port is searching for a high-growth investment by looking for companies that are growing earnings around 25% annually. To start, Drip Port asked Fools to post their favorite high-growth companies. Today, we list your many responses -- resulting in a fat, happy list of leading companies that are growing rapidly.

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By Jeff Fischer (TMF Jeff)
September 12, 2000

The Drip Portfolio has launched a search for a new, high-growth investment. Now that we own a foundation of stable growers, we are in a position to be more aggressive. We're searching for a leading company expected to grow earnings per share at least 20% to 25% each of the next four years, about 15% to 18% on average in each of the following five years, and 11% to 12% on average in the remaining eight years.

To begin our new study, we asked you for company suggestions. Over the last week, the best investment ideas from many of you floated onto the Drip discussion board. I compiled your responses in the following list of high-growth companies. Today we share the entire list so that you can utilize it however you wish -- perhaps print it. Tomorrow, we'll refine the Drip Port's company requirements as we outline our investment criteria. That will shorten our own list considerably.

The first group listed below is the companies that were suggested more than any other. The group is shown in order of popularity based on the number of times each company was suggested. Paychex (Nasdaq: PAYX) (the runaway leader), Corning (NYSE: GLW), and Enron (NYSE: ENE) were the three most popular suggestions. Paychex led, but all three of these leaders were suggested at least twice as often as the next group of runners-up, which included Network Appliances (Nasdaq: NTAP), JDS Uniphase (Nasdaq: JDSU), Nokia (NYSE: NOK), and Scientific-Atlanta (NYSE: SFA).

Every company in the first group was suggested at least twice. Human Genome Sciences (Nasdaq: HGSI) is the cutoff company. After that, every company was suggested only once. Those companies are listed in the order of their expected growth rates, from highest to lowest.

Finally, you can get more information on any company by clicking on its ticker symbol. Some company names are linked as well. Names that are linked take you to good posts made by Fools that briefly describe the company and why they like it. Now, we present the list!

Multiple Votes Listed in Order of Popularity 
                                Market     EPS
                                 Cap      Growth
Company (Ticker)              (Billions)   Est.*
Paychex (Nasdaq: PAYX)            $16      28.3%
Corning (NYSE: GLW)               $91      27.4%
Enron (NYSE: ENE)                 $62      17%
Network Appliance (Nasdaq: NTAP)  $35      56%
JDS Uniphase (Nasdaq: JDSU)       $99      49%
Nokia (NYSE: NOK)                $200      28%
Scientific-Atlanta (NYSE: SFA)    $11      23%
Medtronic (NYSE: MDT)             $60      18%
Ariba (Nasdaq: ARBA)              $38      61%
Nortel Networks (NYSE: NT)       $217      24%
Home Depot (NYSE: HD)            $126      23%
Broadcom (Nasdaq: BRCM)           $51      48%
Sandisk (Nasdaq: SNDK)             $5      34.2%
Harley-Davidson (NYSE: HDI)       $14      18.5%
Pfizer (NYSE: PFE)               $253      19.9%
Millennium Pharm. (Nasdaq: MLNM)  $12      27%
Human Genome Sci. (Nasdaq: HGSI)   $9      N/A

Single Votes Listed in Order of Estimated Growth Rate
Phone.com (Nasdaq: PHCM)           $7     100%
USinternetworking (Nasdaq: USIX)   $0.871  72.5% 
Nextlink Commun. (Nasdaq: NXLK)    $8      70%
InfoSpace (Nasdaq: INSP)           $9      68%
Commerce One (Nasdaq: CMRC)       $12      67.5% 
eBay (Nasdaq: EBAY)               $17      66.7%
Priceline.com (Nasdaq: PCLN)       $4.8    64.3%
Marimba (Nasdaq: MRBA)             $0.370  58.3%
Amazon.com (Nasdaq: AMZN)         $15      57.7%
Redback Networks (Nasdaq: RBAK)   $19      52.8%
Yahoo! (Nasdaq: YHOO)             $57      51%
Newport (Nasdaq: NEWP)             $5      50% 
Red Hat (Nasdaq: RHAT)             $3.6    50%
America Online (NYSE: AOL)       $128      48.4%
Cree (Nasdaq: CREE)                $4.4    47.5%
RF Micro Devices (Nasdaq: RFMD)    $6.4    44%
Applied Micro Cir.(Nasdaq: AMCC)  $24      42.7%
Qiagen (Nasdaq: QGENF)             $6      42.5% 
Medimmune (Nasdaq: MEDI)          $15      41.8%
Vitesse Semi. (Nasdaq: VTSS)      $15      41%
Check Point(Nasdaq: CHKP)         $23      40.7%
PMC-Sierra (Nasdaq: PMCS)         $34      40%
Mercury Interactive(Nasdaq: MERQ)  $9.6    39.1%
Siebel Systems (Nasdaq: SEBL)     $39      38.8%
Palm Inc (Nasdaq: PALM)           $25      37.5%
Qualcomm (Nasdaq: QCOM)           $47      36.8%
Ciena (Nasdaq: CIEN)              $29      36.3%
Trex Company (NYSE: TWP)           $0.528  35%
Identix (AMEX: IDX)                $0.500  35%
Concord EFS (Nasdaq: CEFT)         $7      34.5%
Gemstar-TV Guide (Nasdaq: GMST)   $16      33%
Cisco Systems (Nasdaq: CSCO)     $462      31.6%
Jabil Circuit (NYSE: JBL)         $13      31.5%
Dell Computer (Nasdaq: DELL)     $100      31.3%
Flextronics (Nasdaq: FLEX)        $17      31.1%
EMC (NYSE: EMC)                  $211      29.9%
Solectron (NYSE: SLR)             $29      29.6%
ADC Telelcomun. (Nasdaq: ADCT)    $26      28.8%
Panera Bread Co (Nasdaq: PNRA)     $0.196  28.3%
Knight Trading (Nasdaq: NITE)      $4      27.5%
Genentech (NYSE: DNA)             $44      26.1%
Starbucks (Nasdaq: SBUX)           $6.8    26%
Fastenal (Nasdaq: FAST)            $2.3    25.6%
WorldCom (Nasdaq: WCOM)           $87      25.3%
Krispy Kreme (Nasdaq: KREM)        $1.1    25%

20%-25% Estimated Growth 
Telephone and Data Sys (AMEX: TDS) $7      24.7%
Teradyne (NYSE: TER)              $10.3    24.6%
Chico's FAS (Nasdaq: CHCS)         $0.627  24.2%
Texas Instruments (NYSE: TXN)    $100      24.2%
Chiron (Nasdaq: CHIR)              $8.5    24.0%
Catalina Marketing (NYSE: POS)     $2.2    23.8%
Adaptive Broadband (Nasdaq: ADAP)  $0.970  23.5%
Tetra Tech (Nasdaq: WATR)          $1      23.3%
Motorola (NYSE: MOT)              $74      22.9%
Dollar General (NYSE: DG)          $7      22.7%
Applied Biosystems (NYSE: PEB)    $21      22.5%
Intuit (Nasdaq: INTU)             $12      22.1%
Lowe's (NYSE: LOW)                $19      21.6%
Amer. Power Conv. (Nasdaq: APCC)   $4      21.5%
PeopleSoft (Nasdaq: PSFT)          $9      21.5%
Tyco International (NYSE: TYC)    $97      21.3%
Coldwater Creek (Nasdaq: CWTR)     $0.304  21.2%
Elan (NYSE: ELN)                  $13      20.8%

20% Cutoff
Guidant (NYSE: GDT)               $20      19%
Amgen (Nasdaq: AMGN)              $75      17.2%
Walgreen Co (NYSE: WAG)           $35      16.8%
Alliance Capital Mgmt (NYSE: AC)  $10      16%
AFLAC (NYSE: AFL)                 $15      15.7%
American Capital (Nasdaq: ACAS)    $0.592  15.2%
Hewlett-Packard (NYSE: HWP)      $122      14.9%
Associates First Cap.(NYSE: AFS)  $28      14.7%
Carlisle (NYSE: CSL)               $1.3    14.6%
General Electric (NYSE: GE)      $581      14.4%
Citigroup (NYSE: C)              $250      14.1%
SYSCO (NYSE: SYY)                 $14      13.8%
El Paso Energy (NYSE: EPG)        $14      13.8%
Gillette (NYSE: G)                $32      13.1%
McGraw-Hill Companies (NYSE: MHP) $12      13%
London Pacific Group (NYSE: LDP)   $1.4    13%
Procter & Gamble (NYSE: PG)       $82      12.4%
Merck & Co. (NYSE: MRK)          $155      12.3%
Quaker Chemical (NYSE: KWR)        $0.148  12%
Aventis (NYSE: AVE)               $55       9%
Duke Energey (NYSE: DUK)          $30       8.8%
IXYS (Nasdaq: SYXI)                $0.913   N/A
Nasdaq 100 (Nasdaq: QQQ)          N/A       N/A

*The "EPS Growth Est." is the five-year average earnings per share growth estimate as compiled by First Call.

Now, I realized a few things from this table. First, there are many multibillion-dollar companies in this country! Second, there are many quickly growing companies, too. However, keep in mind that these are earnings per share growth estimates only, and not by any means guaranteed. Also, a handful of these companies are not yet profitable (including Phone.com, USinternetworking, Ariba, Human Genome Sciences, Millennium Pharmaceuticals, Commerce One, Amazon.com, Red Hat, and others). So, take these companies' estimated growth rates for what they're worth. They assume growth from a profitless base.

Finally, many of these companies do not offer Drip programs. We would need to buy them via a synthetic or pseudo-Drip, such as BuyandHold.com or ShareBuilder. For now, this does not play into our decision. We simply want to find the most superb companies, period. Later, the availability of a Drip may become a deciding factor among our small handful of finalist contenders.

Tomorrow we'll begin to weed this list as we start to present our investment criteria for this study. To discuss these companies tonight, before the ax comes down, visit the Drip Companies board.

Fool on!

--Jeff Fischer, TMF Jeff on the boards.

P.S. Every company that Fools suggested was listed. If your entry is not listed, it means that I couldn't confirm the ticker and company name despite three different online searches. This happened to seven companies.

Drip Portfolio


9/12/00 as of ~5:30:00 PM EDT

Ticker Company Price
Change
Daily Price
% Change
Price
CPBCAMPBELL SOUP(0.13)(0.48%)25.94
INTCINTEL CORP0.250.39%64.94
JNJJOHNSON & JOHNSON1.591.68%96.63
MELMELLON FINANCIAL CORP(0.38)(0.80%)46.31
PEPPEPSICO INC1.132.63%43.88

  Day Week Month Year
To Date
Since
7/28/1997
Annualized
Drip0.41%0.92%(4.87%)33.69%73.68%19.29%
S&P 500(0.39%)(0.84%)(2.35%)0.87%57.86%15.71%
S&P 500 (DA)(0.39%)(0.40%)(1.90%)1.28%61.17%16.48%
NASDAQ(1.20%)(3.24%)(8.48%)(5.40%)145.26%33.20%

Trade Date # Shares Ticker Avg Cost/Share
(incl. commission)
Price Long-Term
% Gain
9/8/9745.9818INTC22.8464.94184.37%
11/5/9835.1201MEL34.1046.3135.83%
11/14/9715.019JNJ78.9696.6322.38%
7/28/005PEP48.0043.88(8.59%)
4/13/988.403CPB53.9825.94(51.95%)

Trade Date # Shares Ticker Total Cost Current Value Long-Term
$ Gain
9/8/9745.9818INTC1,050.022,985.941,935.93
11/5/9835.1201MEL1,197.431,626.50429.07
11/14/9715.019JNJ1,185.841,451.21265.37
7/28/005PEP240.00219.38(20.63)
4/13/988.403CPB453.57217.95(235.62)
 
Cash: 
Total: 
60.08
6,561.06
 

Key
• S&P 500 (DA) = dividend adjusted. Dividends have been added to the total return of the index.

Note
Drip Port launched with $500 on July 28, 1997, adds $100 to invest every month, and the goal is to own $150,000 in stock by August of the year 2017. Due to the slow nature of dollar-cost-averaging and our relatively significant starting costs, we do not expect to seriously challenge the S&P 500 for the first three to five years as we build an investment base. The long-term advantages of dollar-cost-averaging still overcome the short-term disadvantages, however. Final note: our investment in Campbell Soup is frozen due to fees instituted in its investment plan. Click here for a history of all Drip Port transactions.