5 More Unloved Growth Stocks

Ah, the joys of skepticism.

We rebel investors at Motley Fool Rule Breakers believe the multibaggers in the making, while not often cheap by the numbers, are always misunderstood. The extraordinary skepticism they face makes them excellent value stocks.

Hitting just one of these home runs can make all the difference to your portfolio. Just ask David Gardner, who bought Amazon at a split-adjusted price of $3.24 a share in 1997. He's up more than 2,200% since.

It's stocks like Amazon that helped David to produce nine years of better-than-20% average annual returns in the real-money Rule Breaker portfolio, even while suffering stinging losses from Guitar Center and 3Dfx, among others.

Let the haters be your friends
David continues this home run investing tradition today at Rule Breakers. You can follow the moves of his rebel alliance with a free trial to the service. Or, if you prefer to pick your own stocks, there's Motley Fool CAPS, a 100% free stock-picking community whose 95,000 participating investors rate stocks on a scale of one to five stars. More than 5,500 rated companies are in the database right now.

How can this help you? Each week, using CAPS, we'll search for one- and two-star stocks that have at least 5% of their available shares sold short but are expected to grow their earnings by no less than 15% over each of the next five years.

Let's have the list
Here are today's unloved growth stocks:

Company

CAPS Rating

Short Interest

5-Year Growth Estimate

Trina Solar (NYSE:TSL)

**

17.46%*

30.0%

NetSuite (NYSE:N)

**

8.70%

25.0%

Monster Worldwide (NASDAQ:MNST)

**

9.40%

22.4%

Blackstone Group (NYSE:BX)

**

11.40%

19.0%

InterMune (NASDAQ:ITMN)

**

32.50%

15.0%

Sources: Motley Fool CAPS, Yahoo! Finance.
*Float not available; based on total shares outstanding.

Bear in mind that this isn't a list of recommendations. Instead, I offer these stocks as candidates for further research.

Not a bad group, eh? Trina Solar is probably being hyped for the wrong reasons, but biotech InterMune is finally beginning show the promise that led to its inclusion in the Rule Breakers portfolio two years ago.

Financier Blackstone, though in the red, appears to have both the temerity and the resources to fund its own deals.

Close to a suite spot
And yet my choice for today is NetSuite, which provides on-demand business software similar to what you'd buy from SAP (Nasdaq: SAP  ) , though on a far smaller scale.

I've had doubts about NetSuite in the past on the basis of valuation. But even I have to admit that, after seeing the stock fall back to $24 a share, it's tempting to take a closer look, as CAPS investor Shupe47 did about a month ago. Quoting from his pitch:

Baby of Larry Ellison. Partnered with ADP to sell directly to their clients. Great business to offer an affordable product to small and mid-market companies who can't afford the likes of major ERP and integrated client management systems.

There's truth to that claim. A comprehensive installation of SAP could cost millions -- if enough users were plugged into the system. On-demand platforms from NetSuite and peer salesforce.com (NYSE: CRM  ) are attractive because they allow customers to forgo a massive capital commitment and yet keep the benefits that business management software provides. I don't see that changing soon.

But I'm more interested in what you think. Would you buy NetSuite at today's prices? Let us know by signing up for CAPS today. It's 100% free to participate.

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


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