5 More Top Growth Stocks

Now that talk of a growth stock rally has spread to the pages of The Wall Street Journal, it's time to check in on some of the funds that ought to be benefiting from the shift. This week, our subject is Fidelity Magellan (FMAGX).

Manager Harry Lange has been saying for a while now that growth stocks -- especially large-cap growth stocks -- are cheap. His portfolio reflects his bluster. Magellan's largest holdings include Google (NASDAQ:GOOG), Corning, and Nokia (NYSE:NOK). Combined, they've helped the fund outdistance the S&P 500 by more than two percentage points year to date.

Not bad, but can the winning streak continue? Perhaps, but Lange is focused on the long haul. Quoting from his most recent letter to shareholders, "I encourage shareholders to be patient, and judge the fund on my longer-term results."

Expect them to be outstanding. Lange and all-star stock pickers like him bet big on growth because:

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 Motley Fool 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:

Bear in mind that this isn't a list of recommendations. Instead, I offer these stocks as candidates for further research. But of these five, it's surgical center operator NovaMed -- which, with a 0.83 PEG ratio, appears to be selling at a discount -- that interests me most.

I'll let CAPS investor pomskua explain the thesis:

This stock will take a few years to mature. Management team is solid and visionary -- a nice combination for those willing to wait through the costs of acquisitions. [Ambulatory surgical centers] are gaining in popularity, especially with outpatient procedures.

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; the service is 100% free.

See you back here next week for five more top growth stocks.

Fool contributor Tim Beyers, who is ranked 3,184 out of more than 27,800 in CAPS, is a sucker for growth stocks and a regular contributor to Rule Breakers. Tim owned shares of Nokia 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 your portfolio's competitive advantage.