Thursday's Top 5 Growth Winners

Ask cheapskate value investors to buy a stock that's achieved a new 52-week high, and you'll get one of two responses:

  1. Hysterical laughter.
  2. Sudden nausea.

Pity them, Fool.

How many times has Marvel Entertainment (NYSE: MVL  ) touched a new 52-week high on its way to becoming a five-bagger in five years? Too many to count, of course.

Let that be a lesson. Rocket stocks -- that is, high-growth stocks that are also realizing heavy price appreciation -- are sometimes worth buying.

Rocket stocks, not rocket science
And sometimes, they're worth buying in bulk. Think of Baidu.com. My buddy Rick Munarriz recommended China's top search engine to our Rule Breakers subscribers at $83.37 in October of last year.

I thought he was nuts. I mean it. The stock was both expensive and on a tear. So I argued against buying it in a January duel here at Fool.com. Now Baidu is a four-bagger. How I wish I had listened to what Rick was telling me all those months ago.

Don't do as I did. Never assume that an expensive stock is too expensive. What looks like a cliff could really be base camp on a climb toward the summit of Everest. Each day in this column, with the help of the 76,000 pro and amateur stock pickers in our Motley Fool CAPS community, we seek to find those that are still climbing.

You'll find our candidates daily in the 52-week-high lists at The Wall Street Journal. But few highfliers will make the cut; we're looking for stocks expected to boost net income by at least 15% annually over the next five years and that earn at least two of five stars from our CAPS contingent.

Here are today's candidates for your consideration:

Company

Closing Price

CAPS Rating
(out of 5)

5-Year Growth Estimate

52-Week Range

Chipotle (NYSE:CMG)

$149.15

***

26.6%

$52.16-$149.54

Apple (NASDAQ:AAPL)

$189.95

****

23.0%

$76.77-$192.68

Gilead Sciences (NASDAQ:GILD)

$47.61

*****

16.1%

$30.96-$47.80

BlackRock (NYSE:BLK)

$212.95

***

16.0%

$139.20-$213.05

Aetna (NYSE:AET)

$58.48

*****

15.7%

$39.02-$58.48

Sources: The Wall Street Journal, Yahoo! Finance, Motley Fool CAPS.

Often, the screen turns up mostly small caps and features some promising -- though speculative -- stocks. The tiny titans can create astounding returns if you buy them before they get discovered.

Big stocks can also come through huge. Witness financier BlackRock, which, thanks to increases in assets under management and excellent performance for its managed funds, is up more than 47% over the past 52 weeks, easily beating the 7% return of the S&P 500 over the same period.

Eat that burrito at your desk
Still, it's impossible to resist the pull of two of my favorite stocks on today's list: Apple and Chipotle. Neither is overvalued, as they might seem at first blush.

Apple, for example, is getting nowhere near enough credit for its expanding retail network, which is just shy of 200 stores -- a far cry from Radio Shack's (NYSE: RSH  ) 6,000 U.S. locations.

Poor comparison, you say? Perhaps. But before it became known as little more than an all-purpose electronics supplier, Radio Shack used its stores to push its own gear, including the once-formidable Tandy TRS-80 computer.

Remember, too, that Apple can fund retail expansion with its $15.3 billion war chest.

Regarding Chipotle, my math says that, were the burrito baron to continue expanding its store network at its present rate, investors could see a double in three years from here. And that's even if per-store sales remain flat.

But that's my take. What's yours? Would you buy either Apple or Chipotle at today's prices? Let us know by signing up for CAPS now. It's 100% free to participate.

I'll be back Tuesday with more rocket stocks. Enjoy your weekend.


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