5 More Top Growth Stocks

Are you really a growth investor?

It's worth asking. Even though talk of a growth stock rally has spread to the pages of The Wall Street Journal, investing in fast movers can be a stomach-churning experience.

Monday offers a good example. After giving ground early, stocks recovered when investors heard more of what they needed to hear from the Federal Reserve. And, of course, the volatility touched all sorts of unrelated tech stocks.

Witness communications chip maker AudioCodes (Nasdaq: AUDC  ) , which was down nearly 5% on no news whatsoever. Surprised? Don't be. Market panics occur daily. That's why all-star investors bet on growth over the very long term. They know that:

How we do it
Of course, not all growth stocks will do. Our weekly hunt is for the next great multibagger. But unlike David Gardner and his team at Motley Fool Rule Breakers, who scour everything from financial statements to trade magazines to clinical reports in their research, we're going to rely on our Motley Fool CAPS investor-intelligence database.

Specifically, we're looking for stocks that have earned a top five-star rating in CAPS and which are expected to grow their earnings by at least 20% annually over the next five years. Five-star stocks are those that the CAPS community, on the whole, believes will outperform the S&P 500.

Let's have the list
With that preamble behind us, here are five more top growth stocks:

Company

No. of CAPS Ratings

Bullish CAPS Ratings

5-Year Growth Estimate

Philips Electronics (NYSE:PHG)

177

167

24.9%

SM&A (NASDAQ:WINS)

144

144

22.5%

Globecomm Systems (NASDAQ:GCOM)

66

65

22.5%

W-H Energy Services (NYSE:WHQ)

134

132

20.0%

Nobel Learning (NASDAQ:NLCI)

35

34

20.0%

Sources: Motley Fool CAPS, Yahoo! Finance

Bear in mind that this isn't a list of recommendations. Instead, I offer these stocks as candidates for further research. But of these five, it's Dutch electronics giant Philips that interests me most.

The numbers are simply too compelling to ignore. Philips sports a microscopic 0.6 PEG (price-earnings to growth) ratio, which, when combined with fattening margins, suggests a bargain.

CAPS investor lowstudent says innovation will fuel higher returns:

Recently finished a multi-year [reorganization] internally. Pared off semiconductor business, which will allow historically strong R&D to go into core businesses. Addition of multiple medical businesses puts company in an interesting position. Strength in specialized lighting gives a decent revenue boost.

Intrigued? Do your own due diligence and then check in with thousands of other investors at CAPS. Add your own commentary if you want. You'll be helping your fellow Fools and testing your ideas at the same time. Click here to get started now; the service is 100% free. 

See you back here next week for five more top growth stocks.


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