5 More Unloved Growth Stocks

Ah, skepticism, how I love thee.

We rebel investors at Motley Fool Rule Breakers believe the multibaggers in the making, while not often cheap by the numbers, are always misunderstood. As such, they face extraordinary skepticism, which, in turn, makes them excellent value stocks.

More are out there. We'll hunt them down each week, right here in this column. Grab your keyboard.

What one stock can do for you
Really, it's worth your time. One home run stock can make all the difference to your portfolio.

Just ask David Gardner, captain of the good pirate ship Rule Breakers, who bought Amazon (Nasdaq: AMZN  ) at a split-adjusted price of $3.24 a share in 1997. He's up 2,117% since.

That helped him overcome stinging losses from stocks including Celera Genomics and Sirius Satellite Radio, to put up nine of years of better than 20% average annual returns as the leader of the real-money Rule Breaker portfolio.

Let the haters be your friends
Today, David and his team still seek misunderstood growers. You can, too, with the help of our completely free-of-charge Motley Fool CAPS investor-intelligence database, which currently contains information on 4,700 stocks.

CAPS applies user input to rate stocks from one (low) to five (high) stars. Using CAPS, we're going to search for one- and two-star stocks that have at least 5% of their available shares sold short but are expected to grow their earnings by no less than 15% over each of the next five years.

Let's have the list
Now, with that preamble behind us, here are five unloved growth stocks:

Company

CAPS Rating

Short Interest

5-Year Growth Estimate

Bankrate (NASDAQ:RATE)

**

42.40%

25.5%

Progenics Pharmaceuticals (NASDAQ:PGNX)

**

14.80%

25.0%

Wind River Systems (NASDAQ:WIND)

**

9.30%

20.0%

Pacific Sunwear (NASDAQ:PSUN)

**

12.40%

15.0%

AMERIGROUP (NYSE:AGP)

**

9.20%

15.0%

Sources: Motley Fool CAPS, Yahoo! Finance as of June 20, 2007.

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 biotech Progenics Pharmaceuticals that interests me most. I'll let my Rule Breakers teammate, Charly Travers, who goes by TMFBreakerCharly in these parts, explain the thesis:

Company has a substantial partnership with Wyeth (NYSE: WYE  ) on a late-stage drug with milestones in the hundreds of millions. My main interest here though is for its HIV drug, which is a potential blockbuster. High risk. High reward.

Intrigued? Do your own due diligence, and then check in with thousands of other investors at CAPS. Feel free to 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 unloved growth stocks.

Bankrate is a Rule Breakers recommendation. Get a month of free access to the entire market-beating portfolio, which features seven stocks that have at least doubled. There's no obligation to subscribe.

Amazon, Amerigroup, and Pacific Sunwear are Stock Advisor picks.

Fool contributor Tim Beyers, who is ranked 6,522 out of more than 30,500 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 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. The Motley Fool's disclosure policy is your portfolio's competitive advantage.


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