5 More Growth Stocks Stuck In the Middle

Have you ever owned a tweener?

A tweener, dear Fool, is like your pal Chuck. Still a great athlete, Chuck no longer rules the hardwood with his 40-inch vertical leap. He's become what we sports addicts call a gamer. He passes more. He's developed a nice shot from the corner. And though he doesn't dunk as much, or as spectacularly, as he did, Chuck remains a force in the paint.

All the same, we fans don't know how long Chuck will be in the starting lineup. Chiseled veteran Abe has a wicked hook shot that won't quit. And Larry, the little guard whose hip-shaking moves smoke defenders, has the makings of a future superstar. Both are vying to cut into Chuck's minutes on the floor.

In Foolish parlance, Chuck is a tweener, Abe is a Rule Maker, and Larry is a Rule Breaker.

Growing up is hard to do
The stock market has plenty of Chucks. They'll either create billion-dollar fortunes as they come to dominate industries, as Cisco, Microsoft, and Google have, or they'll be destroyed in the process, as Gateway was.

Therein lies the problem. Investing in tweeners can be dangerous and exceptionally profitable -- the trick is picking your winners well, as David Gardner has. He produced nine years of 20% average returns while hunting for misunderstood multibaggers in the making. His team at Motley Fool Rule Breakers continues that tradition today.

Let's have the list
You, too, can join in the effort, thanks to Motley Fool CAPS. Each week, we'll use the database to find stocks with CAPS' middling three-star rating that are expected to boost earnings by at least 15% annually over the next five years. Here is today's list:

Company

CAPS Rating

5-Year Growth Estimate

3SBio (NASDAQ:SSRX)

***

54%

Acorn International (NYSE:ATV)

***

40%

ShoreTel (NASDAQ:SHOR)

***

32.5%

China Techfaith Wireless (NASDAQ:CNTF)

***

21.7%

Penn Virginia (NYSE:PVG)

***

17%

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, Chinese biotech 3SBio interests me most, thanks to its impressive pipeline of salable drugs.

CAPS investor liuyan explains:

A leading biotech firm in China with four products in hand. How many biotech firms have that many products here in the US? A very small number of firms, such as Amgen (Nasdaq: AMGN  ) , Genentech (NYSE: DNA  ) , and Gilead Sciences.

But that's not all. 3SBio, which sports just a $300 million market cap, also sports a microscopic 0.44 PEG ratio, along with rapidly rising margins and returns on capital.

Intrigued? Do your own due diligence, then check in with thousands of other investors at CAPS. If you'd like, add your own commentary, too. 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 growth stocks stuck in the middle.


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