By
Tony Arsta
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More Articles
August 11, 2008
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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.
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Company
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Price
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3-Year Average Revenue Growth Rate
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Return on Equity
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Arcelor Mittal (NYSE: MT )
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$79.47
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83.0%
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17.9%
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China Medical Technologies (Nasdaq: CMED )
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$53.02
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63.4%
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21.5%
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Dawson Geophysical (Nasdaq: DWSN )
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$61.42
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40.3%
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19.5%
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Infinera (Nasdaq: INFN )
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$11.44
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493%
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16.1%
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Satyam Computer Services (NYSE: SAY )
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$23.20
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38.5%
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23.9%
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Transocean (NYSE: RIG )
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$127.16
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41.6%
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28.9%
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Vimpel Communications (NYSE: VIP )
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$24.06
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49.7%
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27.0%
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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.
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