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 Marsico Growth.

Manager Tom Marsico was a superstar fund manager for Janus (NYSE: JNS  ) before leaving a decade ago to start his own firm. He's earned a reputation for defying conventional wisdom since. Most recently, this rebellious streak manifested itself via a hunger for international stocks such as the Industrial and Commercial Bank of China and Schlumberger (NYSE: SLM  ) .

I suspect that strategy will pay off in later years. For 2007, though, Marsico Growth lags the index by a little more than 2.5 percentage points.

Tough break. Fortunately, Marsico and all-star stock pickers like him know that:

  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 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:

Company

No. of CAPS Ratings

Bullish CAPS Ratings

5-Year Growth Est.

GigaMedia (NASDAQ:GIGM)

779

765

40.0%

American Dairy (NYSE:ADY)

172

170

32.0%

Vimicro International (NASDAQ:VIMC)

187

181

20.0%

Linktone Ltd.

114

111

20.0%

SkillSoft (NASDAQ:SKIL)

39

39

20.0%

Sources: Motley Fool CAPS, Yahoo! Finance.

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 e-learning specialist SkillSoft, which recently spent $270 million to acquire NETg from Thomson, which interests me most.

Fellow Fool and CAPS All-Star Matt Koppenheffer, who goes by TMFKopp in these parts, explains the thesis. Quoting from his pitch to his CAPS compadres:

The company provides e-learning solutions for various fields of study (including, on the IT side, Microsoft and Cisco certification courses). Growth has been slow recently, but operating margins are improving ... I'm not crazy about the price, but I'll still give it the ol' thumbs up.

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 4,280 out of more than 29,400 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 article at the time of publication. Tim's portfolio holdings can be found at his Fool profile. His thoughts on growth stocks, Foolishness, and investing in general may be found in his blog. GigaMedia is a Motley Fool Global Gains pick. The Motley Fool's disclosure policy is your portfolio's competitive advantage.


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Related Tickers

11/25/2014 3:24 PM
GIGM $1.02 Up +0.03 +3.03%
GigaMedia CAPS Rating: **
JNS $15.63 Up +0.27 +1.76%
Janus Capital Grou… CAPS Rating: *
SKIL.DL $11.19 Down +0.00 +0.00%
SkillSoft Public L… CAPS Rating: ****
SLM $9.53 Down -0.08 -0.78%
SLM Corp CAPS Rating: ***

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