5 Top Tweeners

If you've ever sought to get seriously rich from stocks, then you've owned a tweener.

Neither an up-and-coming superstar nor a dominant veteran, tweeners are poised precariously in between. They're not as hot as they once were, and they're vulnerable both to young upstarts and old stalwarts. But they've honed their skills enough to remain a force to be reckoned with.

The stock market has plenty of tweeners. They'll either create billion-dollar fortunes as they come to dominate industries, as Cisco and Microsoft have, or they'll be destroyed in the process, as Gateway almost was. That's the problem -- investing in tweeners can be dangerous andexceptionally profitable. By picking his winners well, David Gardner produced nine years of 20% average returns hunting for misunderstood multibaggers in the making. His team at Motley Fool Rule Breakers continues the 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 three-star stocks that are expected to boost earnings by at least 15% annually over the next five years. Here are the latest contenders:

Company

CAPS Rating

5-Year Growth Estimate

TASER International (NASDAQ:TASR)

***

35.0%

Broadcom (NASDAQ:BRCM)

***

20.7%

China Digital TV (NYSE:STV)

***

20.0%

Whole Foods Market  (NASDAQ:WFMI)

***

18.1%

Coach (NYSE:COH)

***

18.0%

Sources: Motley Fool CAPS, Yahoo! Finance.

Bear in mind that this isn't a list of recommendations -- merely a roster of candidates for further research.

As the growth grabber who re-upped TASER for Rule Breakers in the late summer of 2005, you'd expect me to recommend the stun-gun pioneer. And I almost did. A Valentine's Day gift to investors in the way of outstanding Q4 earnings nearly convinced me.

Whole Foods almost had me, too. Organics is a growth industry, and Whole Foods' newly progressive governance policies should keep resources focused on shareholder interests.

My, what blue teeth you have
But I'll take wireless chipmaker Broadcom, which at least one analyst believes will continue to win business from Texas Instruments (NYSE: TXN  ) . Others see the stock as genuinely undervalued. CAPS investor Statman42 considers Broadcom as "[b]eat up because of poor profits and market, but a lot went to R & D of future 3G chips, among other things; good long-term play."

CAPS compadre gwilford adds:

Buy in the low 20's and you will double your money in less then a year. [Broadcom] spent a lot on R&D and have more patents [than anybody else does]. They are now working on creating value.

There are risks, of course. The same UBS analyst who likes Broadcom in its match-up with TI says that channel checks suggest delays in its new chips for Nokia (NYSE: NOK  ) .

Perhaps, but I'm not too troubled by that. Roughly 23% of Broadcom's market value is in cash and equivalents. That's a tremendous cushion and should prevent investors from seeing much further downside.

But that's my take. What about you? Would you buy Broadcom at current prices? Let us know by signing up for CAPS now. It's 100% free to participate.

See you back here next week for five more top tweeners.


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