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 and exceptionally 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, courtesy of Motley Fool CAPS. Every week, we'll use the database to find three-star stocks (out of a possible five) that are expected to boost earnings by at least 15% annually over the next five years. Here are the latest contenders:

Sources: Motley Fool CAPS, Yahoo! Finance.

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

I like my choices, though. Google (Nasdaq: GOOG) still can't touch Baidu.com in China, and the latter's recent deal with Omniture (Nasdaq: OMTR) should help deliver better results to advertisers and, thereby, protect its lead.

Profits during playtime
Even so, I prefer fellow PRC performer Sohu.com, which keeps blowing away its targets despite revising them. Such is the fortunate timing of a digital gamer operating in the Sino superpower in the 21st century. CAPS investor wildeagain explained it best in December, I think: "Read recently that the Internet is only available to 13% of the Chinese and the ones that do have it are all playing Sohu's games. With 13% on the Net, wait until that's 50% or higher."

I can't quite confirm those numbers, though they are within spitting distance of official statistics. According to the China Internet Network Information Center's "21st Statistical Survey Report on The Internet Development in China," Internet penetration was 16% at the end of 2007, compared with a global average of 19%. However, some portions of China, such as Beijing and Shanghai, have penetration levels north of 45%.

So … 13%? 16%? Either way, plenty of upside for Sohu.com remains. But that's my take. What's yours? Would you buy Sohu.com 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.