Raise your hand if you had heard of Intuitive Surgical
But I shouldn't be surprised. This pioneering maker of robot surgeons, a company David Gardner singled out in Motley Fool Rule Breakers two years and 147% ago, still has only eight analysts covering it. How could you be expected to know Intuitive Surgical if Wall Street had mostly ignored it?
Running with the rebels
Believe me, I'm not here to rub it in. I bring it up because the best value stocks are often found among the weeds in fertile fields of growth. Frequently, they'll look expensive. Intuitive Surgical did, as did many of the market's 10 best stocks before they, too, became multibaggers.
That's why David Gardner and his team still seek first movers in important industries. You can, too, with the help of our completely free-of-charge Motley Fool CAPS investor-intelligence database, which currently contains information on more than 4,000 stocks.
CAPS applies user input to rate stocks from one to five stars. So, using CAPS, we're once again going to search for stocks that haven't yet met the threshold for a star rating, that have a minimum $250 million market cap, and that are expected to grow their earnings by at least 20% annually over each of the next five years.
Let's have the list
Now, with that preamble behind us, here are five growth stocks that have yet to be discovered.
Company | No. of | Bullish | 5-Year |
|---|---|---|---|
Superior Bancorp | 4 | 3 | 40.0% |
Alliance Holdings | 9 | 9 | 24.5% |
Dionex | 4 | 2 | 20.0% |
Providence Service | 9 | 6 | 23.5% |
Masisa S.A. | 7 | 7 | 25.0% |
Bear in mind that this isn't a list of recommendations. Instead, I offer these stocks as candidates for further research. But it's coal miner Alliance Holdings and its minuscule 0.66 PEG ratio, which suggests a steep discount, that interests me most. Mix in a 4.4% dividend yield and overwhelming bullish sentiment in CAPS, and I start to salivate.
Intrigued? Do your own due diligence, and then check in with thousands of other investors at CAPS. And if you'd like, add your own commentary. You'll be helping your fellow Fools and testing your ideas at the same time. Click here to get started now; it's 100% free to participate.
See you back here next week for five more undiscovered growth stocks.
How great is growth? Three of the dozens of stocks in the market-beating Motley Fool Rule Breakers portfolio, which includes Intuitive Surgical, have more than tripled in two years. Care to find out who they are? Help yourself to 30 days of free access to the service.
Fool contributor Tim Beyers, who is ranked 1,256 out of more than 23,600 in CAPS, is a sucker for growth stocks and a regular contributor to Rule Breakers. Tim didn't own shares in any of the companies mentioned in this story at the time of publication. All of his portfolio holdings can be found at Tim's Fool profile. His thoughts on growth stocks, Foolishness, and investing in general may be found in his blog. The Motley Fool's disclosure policy is a Fool's greatest discovery.
