Explosive Growth Stocks Already Turning a Profit

Growth stocks can ignite your portfolio, sending its value rocketing up, up, and away at an extraordinary pace. But we all know the dangers involved in this kind of investing -- play with fire, and you might get burned.

Ideally, we want to find stocks with exceptional growth potential and a little less risk. Finding companies that are already profitable and earning a solid return on equity can help. So can companies that are highly regarded by the Motley Fool CAPS investing community. Stocks earning a five-star rating from the community have beaten the market by 12%, annualized, over the first 18 months of tracking.

With that in mind, I used our CAPS screener to pick out some fast growers that are a bit less speculative. I searched for companies that have increased revenue by more than 35% over the past three years, but also had positive earnings per share and a return on equity greater than 15% over the last 12 months.

They also have:

  • A five-star CAPS rating.
  • A market cap greater than $100 million.

Company

Price

3-Year Average Revenue Growth Rate

Return on Equity

Arcelor Mittal (NYSE: MT  )

$79.47

83.0%

17.9%

China Medical Technologies (Nasdaq: CMED  )

$53.02

63.4%

21.5%

Dawson Geophysical (Nasdaq: DWSN  )

$61.42

40.3%

19.5%

Infinera (Nasdaq: INFN  )

$11.44

493%

16.1%

Satyam Computer Services (NYSE: SAY  )

$23.20

38.5%

23.9%

Transocean (NYSE: RIG  )

$127.16

41.6%

28.9%

Vimpel Communications (NYSE: VIP  )

$24.06

49.7%

27.0%

Data provided by Motley Fool CAPS as of Aug. 8, 2008.

As always, a screen is only the first step in finding a winning investment. These companies have seen outstanding revenue growth over the past few years, but there's no guarantee they will continue those recent trends. Still, this list may be a good place to start.

Looking for more ideas? Eager to discuss these? Join our 115,000-plus-member Motley Fool CAPS investing community.

Dawson Geophysical is a Motley Fool Hidden Gems recommendation. Satyam Computer Services is a Stock Advisor selection. Infinera is a Rule Breakers pick. The Motley Fool owns shares of Infinera. Try any of our Foolish newsletter services free for 30 days.

Tony Arsta own shares in Dawson Geophysical. He likes red-hot stocks and keeps plenty of aloe on hand to treat the burns. The Fool has a smokin' disclosure policy.


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