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. Each week, right here in this column, we'll hunt them down. 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 at a split-adjusted price of $3.24 a share in 1997. He's up more than 2,400% since.

That helped him to overcome stinging losses from Sirius Satellite Radio, 3Dfx, and others to put up nine 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 more than 4,900 stocks.

CAPS applies user input to rate stocks from one star (low) to five (high). Using CAPS, we're once again 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)

**

34.50%

27.2%

Goodrich Petroleum (NYSE:GDP)

**

43.50%

20.0%

Radiation Therapy Services (NASDAQ:RTSX)

**

16.30%

16.5%

Guitar Center (NASDAQ:GTRC)

**

21.70%

16.2%

JetBlue Airways (NASDAQ:JBLU)

**

24.20%

15.3%

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 financial data specialist Bankrate that interests me most, and not just because it's a Rule Breakers pick.

Much of the allure for me is in the numbers. Bankrate sports a capital-light business model that produces heaping helpings of free cash flow (more than $30 million over the trailing 12 months, according to Capital IQ).

Better still, the stock sports a 1.03 PEG ratio, which suggests that the shares are no worse than reasonably valued and perhaps even cheap. With deals like this occurring regularly, I suspect it's the latter.

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 unloved growth stocks.


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