The CAPS Screen: 5 Small Caps on Fire

Few companies double their earnings in just three years. Those that do have the potential to earn investors exceptional returns. But since everyone wants to own large or mid-cap monster stocks like Suntech Power (NYSE: STP), they'll usually cost you an arm and two legs.

But there is an area in the stock market where the fastest growers are frequently overlooked -- because they're too small to attract big Wall Street firms' attention. In anxious markets like these, a small cap on fire can make an outrageously cheap stock.

With that in mind, I used our new CAPS screening tool to pick out some of the fastest-growing small companies. The following five companies have doubled their earnings (26% annual growth) over the past three years.

They also have:

• Price-to-earnings ratios under 35.
• Market capitalizations between $100 million and $2 billion.
• Five-star ratings, the highest possible, from our Motley Fool CAPS community.

Remember, in the first year for which we have data, five-star companies outperformed with an average gain of 28%.                                                                                               

Company	Share Price	Sector	Market Cap
Boots and Coots Int'l Well Control (AMEX: WEL)	$2.35	Basic materials	$178 million
Dynamic Materials (Nasdaq: BOOM)	$42.91	Basic materials	$541 million
Global Industries (Nasdaq: GLBL)	$16.78	Basic materials	$1.9 billion
Grey Wolf (AMEX: GW)	$7.78	Basic materials	$1.4 billion
ViroPharma (Nasdaq: VPHM)	$9.97	Health care	$697 million

Data from Motley Fool CAPS and Yahoo! Finance as of June 2.

Of course, screens are merely a first step in the stock-selection process. Just because a company has a history of doubling earnings doesn't necessarily mean it will continue its high-octane growth, or even that it will make a great investment. Picking the right stocks always requires due diligence.

Come and join us on Motley Fool CAPS to dig into these companies further. Let our 105,000-person-strong (and counting) CAPS community help you identify tomorrow's multibaggers. There's information and opinions on more than 5,600 stocks, and don't forget the screening tool to help you sort information. It's all free.

For more Foolery:

• Early Signs of Winning Stocks
• Tomorrow’s Monster Stocks
• The CAPS Screen: 5 Stocks on a Roll