5 Stocks Geared for Growth

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A stock's price follows its earnings, which in turn follow its sales. A company needs only to take care of its business for investors to profit in the long run.

With that in mind, examining companies whose revenues and profits are rising -- and which inspire analysts' confidence in continued future growth -- should give us a fertile field in which to discover solid candidates for long-term outperformance.

The roaring 20s
Below are a handful of companies that have enjoyed 20% or more annual growth in sales and earnings over the past three years, and for which analysts forecast total growth of 20% or more over the next two years. We'll then pair up those predictions with the community stock research at Motley Fool CAPS, to get an idea of which companies the 140,000-plus members think have the best chances of beating the market over the long haul.

Company	3-Year Past Revenue Annual Growth	3-Year Past EPS Annual Growth	Est. 2-Year Future EPS Growth	Est. 2-Year Future Revenue Growth	CAPS Rating (out of 5)
Amedisys (Nasdaq: AMED)	41%	41%	44%	40%	**
IntercontinentalExchange (NYSE: ICE)	62%	95%	20%	36%	****
NCI	30%	46%	39%	32%	***
Netflix (Nasdaq: NFLX)	22%	21%	51%	46%	***
Open Text (Nasdaq: OTEX)	24%	121%	28%	25%	**

Source: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

Just because an analyst predicts that a company will feature fantastic growth opportunities doesn't mean those predictions will become reality. But their preferred picks do offer an excellent starting place for your own research into extreme buying opportunities, so let's see why the operations of one of these companies may or may not be held in high esteem by investors, considering it appears to be a sales and profits machine.

Tippling at the speakeasy
The roll-ups under way in the home-health-care industry remind me of the consolidation in the funeral home business a few years back when relatively small, privately run funeral parlors and cemeteries were brought under the umbrella of the big guns in the industry, Stewart Enterprises and Service Corp. International (NYSE: SCI).

There are more than just a few publicly traded competitors in home health care, and Amedisys and Gentiva Health Services (Nasdaq: GTIV) are just two that are pursuing growth by acquisition. Gentiva recently completed the purchase of Magna Home Health, allowing it to expand into a number of new areas. It also bought the assets of the home-care business of Nicholas County in West Virginia.

Similarly, Amedisys announced it was purchasing the home-health-care business of New Jersey's Hackensack University Medical Center. The operation's $19 million in annual revenue gives Amedisys its first foray into the state. It's made nearly two dozen acquisitions over the past few years.

Investors are bullish on the fact that Amedisys has no need to fear Obamacare, even if others do. And analysts predict that Amedisys and rival LHC Group (Nasdaq: LHCG) are unlikely to be affected by industry reforms that target Medicare reimbursements. Both have received upgrades from Wall Street.

CAPS member CupOJoeGA thinks any reforms won't happen for several years, while jemsa thinks the health-care industry is likely to be the next beneficiary from investors moving into these stocks.

At just 10 times trailing earnings and nine times forward estimates, Amedisys is one of the cheapest home-health-care providers. The company last month reiterated its 2009 guidance, and although it is still recovering from the resignation of two executives, that had more to do with an internal power struggle than anything more sinister. Just trading at the average valuation of its sector would give Amedisys a price of around $55 a share -- about a 30% premium to where it trades now.

The risk, of course, is that the pay-to-grow plan doesn't pan out. Acquisitions can get tricky and stumbles by buyers are common as integrating different corporate cultures proves difficult. Amedisys may appear to be attractively priced, but sometimes there's a reason for it.

No Great Depression
It pays to start your own research on these stocks on Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made -- all from a stock's CAPS page. Why not head over to the completely free CAPS service and let us hear what you've got to say about these or any other stocks that you think we should put on our dance card?