5 More Top Growth Stocks

Are you really a growth investor?

It's worth asking. Fast-moving tech stocks have taken a beating recently, leading to a slew of bargains for those with the guts to buy. Just ask investors who hold shares of AeroVironment (Nasdaq: AVAV  ) , which yesterday fell more than 6% on no news whatsoever. Sheesh.

No matter. All-star investors bet on growth over the very long term. They know that:

  1. Businesses that make investors billions always begin as growth stocks.
  2. The best of them feature massive and identifiable competitive advantages.
  3. Growth as a strategy has the capacity to deliver 20% or greater annual returns for decades at a time.

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 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 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 community, on the whole, believes will outperform the S&P 500.

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

Company

No. of CAPS Ratings

Percent Bulls

5-Year Growth Estimate

Weatherford International (NYSE: WFT  )

683

97.2%

26.7%

Cognizant Technology Solutions (Nasdaq: CTSH  )

848

96.9%

24.9%

Buffalo Wild Wings (Nasdaq: BWLD  )

4,559

93.9%

24%

Under Armour (NYSE: UA  )

2,325

91.6%

21.4%

Apple (Nasdaq: AAPL  )

20,394

92.5%

20.8%

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.

We've some great companies to work with. Buffalo Wild Wings may be mild right now but looks hot for the long-term. Weatherford, meanwhile, is basking in the sun, Under Armour is on the run, and Cognizant is on the upswing.

The Apple of my iPhone
My favorite, though, is Apple, whose shares I now own. You can read my reasoning here. Or you can take the word of CAPS All-Star jstegma, who wrote this in September:

In the $120 range, the downside risk is fairly limited. Earnings should continue to be good based on the accounting method they are using for iPhone sales (treating as subscription revenue).

Good? That's not a strong enough word. Apple deferred $5.8 billion of iPhone and AppleTV revenue in the latest quarter because of its accounting policies. "If iPhone revenue was not deferred, iPhone [sales] would have represented 39% of Apple's revenue in the September quarter," said CFO Peter Oppenheimer.

What this means practically is that, like Dell (Nasdaq: DELL  ) , the iEmpire generates billions more cash than is obvious from a quick glance at its income statement and, unlike Dell, has years of guaranteed earnings growth stored up on its balance sheet. Cash, too; $24.5 billion worth, specifically -- equal to more than one-quarter of its market value as of this writing. Crazy.

But that's my take. I'm more interested in what you think. Would you buy Apple 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 with five more top growth stocks. Fool on!

Fool contributor Tim Beyers, is slowly recovering his CAPS rating. He had stock and option positions in Apple at the time of publication.

Tim seeks the best of the tech as a contributor to Motley Fool Rule Breakers, which counts AeroVironment and Under Armour among its recommendations. Under Armour is also a Hidden Gems pick, as is Buffalo Wild Wings. Apple is a Stock Advisor selection. Dell is an Inside Value pick. Get access to all of Tim's writings here. The Motley Fool owns shares of Buffalo Wild Wings and Under Armour and has a disclosure policy.


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