America's Next Top Growth Stock

Growth stocks are the beauties of the stock world, plain and simple. They're exciting, they have good stories, and they can make you a lot of money.

But for all their beauty, growth stocks are also the prima donnas of the market. They can be erratic, they don't always live up to their billing, and they tend to attract a shareholder base that's ready and willing to run at the first signs of slowdown. For those reasons, caution is certainly in order when you enter the world of growth investing.

Fortunately, The Motley Fool's CAPS service brings us the collective intelligence of a community of more than 160,000 investors. It's a great resource for separating the Jessica Albas from the Jabba the Hutts. Each of the stocks competing for this week's top spot has a market cap of at least $100 million, and each grew its earnings per share by an average of 15% or more per year over the past three years. Let's meet our contestants:

Source: Yahoo! Finance, Capital IQ (a Standard and Poor's company), and CAPS as of April 6.

Growth without good looks
The CAPS members who have put their thumbs down on Amazon seem to share a similar position: The stock is simply overpriced. And that shouldn't be all that surprising, since it's hard to call a P/E of 66 "cheap."

Of course, back in 2006, investors would have been met with a similar P/E ratio, and the stock has more than tripled since then. And that gain was driven primarily by a quadrupling of Amazon's earnings per share since 2006.

But the question facing Amazon investors now is whether the company can continue to grow that fast, even as it becomes one of the largest retailers out there. Already Amazon is as large as Target (NYSE: TGT) and Best Buy (NYSE: BBY), combined. Personally, I'm a big fan of Amazon's business, but I'm with the CAPS bears when it comes to the stock's valuation.

But if Amazon's success has gotten investors a little too excited about its stock, Gap's fall from grace earlier in the decade has largely kept a lid on its stock price. Over the past few years, the company has seen anything but a revival in sales growth, but has managed to significantly boost its margins, which has led to a healthy bump in earnings. But that bottom-line growth hasn't been enough to lift the opinions of many CAPS members who feel that the company is simply beyond its prime.

And while most Fools seem to have a pretty high opinion of Buffalo Wild Wings as a business (this Fool also really digs the wings), the stock's current valuation seems to be just a bit too hot for some CAPS members to stomach.

Strutting their stuff
While the stocks above haven't been able to sufficiently inspire CAPS members, Monsanto has.

Over the past decade, it seems as if Monsanto's seeds weren't the only things genetically modified for maximum growth. While the company's revenue "only" doubled over that time period, its margins exploded and led to a near-1,000% jump in earnings per share.

The future could be even brighter for the company, as global population growth fuels an ever-growing need for high-quality agricultural products.

Monsanto scored a four-star rating from the CAPS community, but that wasn't quite enough to beat out this week's top growth stock: Transocean.

Transocean's thesis remains beautifully simple. We're likely stuck using hydrocarbons to transport people and freight for some time to come. So we'll need to continue tracking down new sources, which means pushing oil companies offshore. As one of the biggest and best players in the offshore industry, it's likely that Transocean will snag a good chunk of that new business. The President's recent expansion of domestic offshore drilling only benefits the company more.

Now go vote!
Do you think Transocean has what it takes to be America's next top growth stock? Head over to CAPS and let the rest of the community know what you think.

When you've got a big winner, sometimes the best thing you can do is just hang on and enjoy the ride.