5 More Top Growth Stocks

Are you really a growth investor?

It's worth asking. Having taken a beating recently, fast-moving tech stocks have created 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 Infinera (Nasdaq: INFN  ) , which on Wednesday fell more than 6% on no news whatsoever. 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 105,000-person-strong 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 best outperform the S&P 500.

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

Company

CAPS Rating

Percent Bulls

5-Year Growth Estimate

Alvarion (Nasdaq: ALVR  )

*****

97.1%

25.2%

Titan Machinery (Nasdaq: TITN  )

*****

96.8%

25.0%

Peerless Manufacturing (Nasdaq: PMFG  )

*****

98.2%

25.0%

The9 Limited (Nasdaq: NCTY  )

*****

97.2%

24.8%

W&T Offshore (NYSE: WTI  )

*****

96.4%

22.5%

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.

We have some great companies to work with. Motley Fool Rule Breakers recommendation Alvarion is a favorite of mine (I own shares) whose story recently improved via a development deal with Canada's Nortel Networks (NYSE: NT  ) .

Peerless Manufacturing caught my eye in December, but hasn't moved much since. The9, meanwhile, continues to cash in as the China distributor for Blizzard's World of Warcraft.

W + T = P, for "profit"
My favorite today is, in some ways, a rekindling of a not-so-old flame. I gave W&T Offshore the thumbs-up in CAPS in September 2006. Foolish colleague Tim Hanson had swayed me with this pitch:

As a result of a recent acquisition from Kerr-McGee, W&T may be sitting on a trillion cubic feet (TCF) of natural gas reserves in the Gulf of Mexico. That's one of the largest reserves sitting right next to one of the largest markets in the world. I like that position.

And I liked that insiders were spending millions on shares of W&T.

But I got impatient. A little more than a year later, I abandoned the stock for having gone mostly sideways. It has since doubled. Dumb.

So why try again? Efficiency. W&T is as smooth an operator as you'll find among natural gas explorers. CAPS investor TexasLonghorns explains in this pitch from April: "W&T Offshore ... is benefiting from strong production growth. The company, which owns working interests in more than 200 offshore fields in the Gulf of Mexico, last year achieved 89% success in its drilling program and posted 27% production growth."

Revenue and profits are each up more than 30% over the trailing 12 months as a result. With W&T still acquiring territory as of March, sustained growth appears likely.

But that's my take. I'm more interested in what you think. Would you buy W&T Offshore 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!

Alvarion and Infinera are Rule Breakers recommendations. Try this market-beating service with a free 30-day trial. There's no obligation to buy.

Fool contributor Tim Beyers, who is ranked 15,917 out of more than 105,000 participants in CAPS, is a regular contributor to Fool.com and also writes for Rule Breakers. Tim owned shares of Alvarion at the time of publication. The Motley Fool owns shares of Infinera. The Fool's disclosure policy is your portfolio's competitive advantage.


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