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I hate to go all Brett Favre on you, but I retired this weekly column too soon.

Earlier this year, I began profiling several growth stocks that weren't as outlandishly priced once investors factored in future profit targets. Large trailing valuations were quickly dwarfed by reasonable forward valuations.

I thought I had exhausted most of the feasible candidates, but then this brutal market sell-off happened. Instead of quality companies growing into their seemingly lofty multiples, many great companies have simply fallen back into tempting valuations.

We're already waist deep in 2011, so let's see how some of fallen market darlings are trading relative to their 2012 multiples. Some of the results may surprise you.

Company Close This Year P/E Next Year P/E My Watchlist
Travelzoo (Nasdaq: TZOO  ) $39.69 27 19 Add
Sirius XM Radio (Nasdaq: SIRI  ) $1.65 33 24 Add
SandRidge Energy (NYSE: SD  ) $6.55 47 13 Add
Crocs (Nasdaq: CROX  ) $24.63 18 15 Add
Demand Media (NYSE: DMD  ) $8.36 35 21 Add

Source: Yahoo! Finance.

Valuation is only a number
Many of these multiples -- even those clocking in for next year -- are chunky. You don't often hear something along the lines of "this stock is so cheap that it's trading for a mere 24 times next year's projected profitability."

Then again, there is more to this basket of presumably pricey stocks than meets the cynical eye.

Travelzoo has seen its stock shed more than half of its value in less than three weeks. The travel deal publisher may have delivered a poorly received quarterly report that whiffed badly on expectations for both ends of the income statement, but Travelzoo is still growing. Revenue and earnings climbed 34% and 51% respectively in its latest quarter. The company's travel and local experience deals will also come in handy if we do fall back into another recession. Hoteliers, cruise ships, and airlines will have more vacancies to discount, and Travelzoo will be there for thrifty vacationers.

Yes, folks. Sirius XM Radio is now trading at a realistic multiple. Just two years ago, the satellite radio operator was on the brink of bankruptcy. Now it's a soundly profitable media heavyweight that continues to grow its base of premium subscribers. With a price hike set for early next year and a platform update slated for later this year, the near-term catalysts are clearly there for Sirius XM.

SandRidge Energy saw its stock dive 16% yesterday, as energy stocks in particular got hammered. Despite having billions in proved reserves, the oil and gas explorer that began this brutal month by opening at $11.93 has come gushing all the way down to $6.55 at yesterday's close. It obviously didn't help that SandRidge missed Wall Street's profit target during last week's quarterly report, but that -- and the slip in energy prices -- doesn't justify a price this low.

Crocs once had hot -- though fashionably dubious -- resin shoes. Popularity peaked sooner than the company expected a few years ago, and Crocs was left with too much inventory and too few believers. It's a shame, because as most of the market dismissed Crocs as a one-time fad, it has pieced together a beauty of a comeback. Crocs widened its product lines, successfully expanding overseas. Crocs is now trading at a forward earnings multiple in the teens, but growing slightly faster than that.

Finally we have Demand Media. It may never shed its "content farm" tag, but the company behind, eHow, and several other magnetic websites is now trading for less than half of its $17 IPO price. Demand Media's stock got smacked around a bit earlier this year when Google (Nasdaq: GOOG  ) tweaked its search engine algorithm, penalizing the rank of some of Demand Media's properties. But it's hard to bet against one of the more efficient content creators that has article assignments and promotion down to a science.

Adding it up
None of these stocks are immune to a market meltdown. If you're looking for bulwarks, you'll have to find them somewhere else.

These investments are largely high-beta growth stocks, and will likely remain that way for several more years. The key here, though, is that they aren't as expensive as pundits make them out to be.

It's the opportunity that you didn't know that you were waiting for.

The Motley Fool owns shares of Google. Motley Fool newsletter services have recommended buying shares of Travelzoo and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Longtime Fool contributor Rick Munarriz also believes that expensive stocks can get even more expensive, too. He does not own shares in any of the stocks in this story. He is part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.

Read/Post Comments (2) | Recommend This Article (12)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 09, 2011, at 3:41 PM, syberdentist wrote:

    Tzoo is 80+% short. There will be a lot of short covering in the next 2-3 weeks once the macroeconomic dust settles and this should go back into the mid 60's prior to their earnings release. if they announce inline or better than expected #s this time this stock is bound to go to 80's easily.

    Following today's press release, their VP said they are on track to get annualized $100M gross revenues in just local deals which indicates they are well above $25M this quarter. The street expects $41M on the high side and 38c eps. My guestimate is that TZOO will handsomely beat on both.

    Disclosure: I am long Tzoo

  • Report this Comment On August 09, 2011, at 4:07 PM, thersitesrules wrote:

    If you're going to recommend it, you might also want to disclose that Motley Fool buys content from DMD.

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