3 More Undiscovered Growth Stocks

Game-changing discoveries, though typically the stuff of legend, happen more often than we think.

This week provides yet another example. On Tuesday, Chinese authorities reported that hundreds of porcelain artifacts dating to the Ming dynasty, which ruled China from the 14th to the 17th centuries, have been recovered from a shipwreck in the South China Sea.

The find follows a similar discovery of sunken treasure made three weeks ago by Odyssey Marine Exploration (AMEX: OMR  ) . As much as $500 million is at stake in that quest, if press reports are to be believed.

Running with the rebels
What does any of this have to do with investing? Plenty. Unearthing outstanding growth stocks early in their development can create game-changing returns for your portfolio.

Just ask David Gardner. By investing in up-and-coming fast movers such as Amgen (Nasdaq: AMGN  ) , he produced nine years of 20% average annual returns. History told him that these were the best value stocks available, and many became daybaggers.

That's why David and his team at Rule Breakers still seek to get in early on businesses that are reshaping, or creating, 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 4,600 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 15% over each of the next five years.

Let's have the list
Now, with that preamble behind us, here are three more growth stocks that have yet to be discovered.

Company

No. of CAPS ratings

Bullish CAPS ratings

5-Year Growth Estimate

Texas Capital BancShares (NASDAQ:TCBI)

10

10

15.0%

Schawk (NYSE:SGK)

9

4

15.0%

Moog (NYSE:MOG-A)

8

8

15.0%

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. My favorite, however, is Texas Capital BancShares, which provides banking services to businesses and high-net-worth individuals in Texas.

With Dell in Austin, Texas Instruments (NYSE: TXN  ) in Dallas, and Sysco in Houston, it's easy for me to envision TCBI being an excellent business. Perhaps that's why insiders still own more than 8% of the company.

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 three more undiscovered growth stocks.

How great is growth? Seven of the dozens of stocks in the market-beating Motley Fool Rule Breakers portfolio have more than doubled. Care to find out what they are? Click here to get 30 days of free access to the service.

Sysco is an Income Investor pick. Dell is a recommendation of both the Inside Value and Stock Advisor services.

Fool contributor Tim Beyers, who is ranked 4,874 out of more than 30,300 rated investors 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. 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. The Motley Fool's disclosure policy is an investor's greatest discovery.


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