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 the highest five-star rating from the community have beaten the market by 12%, annualized, over the first 20 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% annually 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 |
Recent Price |
3-Year Revenue Growth Rate |
Return on Equity (TTM) |
---|---|---|---|
Cemex |
$20.65 |
41% |
18.5% |
Cognizant Technology Solutions |
$29.74 |
42.3% |
22.7% |
Dynamic Materials |
$30.03 |
37.5% |
22.4% |
McDermott International |
$34.00 |
47% |
43.3% |
Taseko Mines |
$2.64 |
76.2% |
23.6% |
Vale |
$25.41 |
46.9% |
33.2% |
Vasco Data Security |
$13.25 |
37.7% |
26.8% |
Data provided by Motley Fool CAPS as of Aug. 19, 2008. TTM = trailing 12 months.
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.