5 More Top Growth Stocks

Are you really a growth investor?

It's worth asking. Fast-moving tech stocks have taken a beating recently, leading to a slew of bargains for those with the guts to buy.

No surprises there. Market panics occur daily. Just ask investors who hold shares of EMC (NYSE: EMC  ) , which on Tuesday reported excellent earnings, only to see its stock fall 6%. The reason? Subsidiary VMWare failed to impress Wall Street. Sheesh.

That's why all-star investors bet on growth over the very long term. They know that:

  1. Businesses that make investors billions always begin as growth stocks.
  2. The best of them feature massive and identifiable competitive advantages.
  3. Growth as a strategy has the capacity to deliver 20% or greater annual returns for decades at a time.

How we do it
Of course, not all growth stocks will do. Our weekly hunt is for the next great multibagger. But unlike David Gardner and his team at Motley Fool Rule Breakers, who scour everything from financial statements to trade magazines to clinical reports in their research, we're going to rely on our Motley Fool CAPS investor-intelligence database.

Specifically, we're looking for stocks that have earned a five-star rating in CAPS and which are expected to grow their earnings by at least 20% annually over the next five years. Five-star stocks are those that the community, on the whole, believes will outperform the S&P 500.

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

Company

No. of CAPS Ratings

Bullish CAPS Ratings

5-Year Growth Estimate

Northgate Minerals (AMEX:NXG)

1,083

1,050

46.0%

National Oilwell Varco (NYSE:NOV)

1,057

1,038

37.4%

China Fire & Security (NASDAQ:CFSG)

869

863

31.8%

Core Laboratories (NYSE:CLB)

323

313

25.0%

Sigma Designs (NASDAQ:SIGM)

618

595

23.3%

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.

At first, Sigma Designs, an active and well-performing Rule Breakers pick, tempted me. Why? As with last week's guest, Silicon Image (Nasdaq: SIMG  ) , Sigma stands to profit from the inevitability of high-definition media -- but for different reasons. Sigma's chips are making their way into boxes that help deliver Internet signals to TVs. Intriguing, yes?

Journey to the core
I'll say, but my pick for today is Core Laboratories, which specializes in extracting oil from tough-to-reach spots. CAPS All-Star timefordough explains why this matters:

Oil companies can no longer leave large percentages of a well in the ground. Core Labs can improve recovery by almost 40%. This is a long-term story and with limited competition [Core Laboratories] can expect sustained growth for quite some time. [Core Labs] is currently oversold and has not participated in the current rally. This is a great buying opportunity.

I agree. And I'll add that Core's returns on equity and capital have risen dramatically in recent years to 85.6% and 29.6%, respectively, over the trailing 12 months. Margins have also increased, yet the stock's valuation still looks attractive.

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

See you back here next week with five more top growth stocks. Fool on!


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Related Tickers

7/23/2014 12:03 PM
CLB $167.25 Up +0.91 +0.55%
Core Laboratories CAPS Rating: ****
EMC $28.74 Up +0.22 +0.77%
EMC Corp CAPS Rating: *****
NOV $86.09 Up +0.06 +0.07%
National Oilwell V… CAPS Rating: *****
NXG.DL $0.00 Down +0.00 +0.00%
Northgate Minerals… CAPS Rating: ****
SIGM $4.47 Down -0.01 -0.22%
Sigma Designs CAPS Rating: ****
SIMG $4.80 Down -0.12 -2.44%
Silicon Image, Inc… CAPS Rating: ****

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