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 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 (NYSE: CX  )

$20.65

41%

18.5%

Cognizant Technology Solutions (Nasdaq: CTSH  )

$29.74

42.3%

22.7%

Dynamic Materials (Nasdaq: BOOM  )

$30.03

37.5%

22.4%

McDermott International (NYSE: MDR  )

$34.00

47%

43.3%

Taseko Mines (NYSE: TGB  )

$2.64

76.2%

23.6%

Vale (NYSE: RIO  )

$25.41

46.9%

33.2%

Vasco Data Security (Nasdaq: VDSI  )

$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.

Fool analyst Tony Arsta does not own shares of any company mentioned. Cemex is a Global Gains pick. Dynamic Materials is a Motley Fool Hidden Gems recommendation. Vasco Data Security International and Cemex are Stock Advisor picks. The Fool owns shares of Cemex. Try any of our Foolish newsletters today, free for 30 days. The Fool has as disclosure policy.


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