5 More Top Growth Stocks

Are you really a growth investor?

It's worth asking. Fast-moving tech stocks have taken a beating recently, leading to 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 Orthovita (Nasdaq: VITA  ) , which on Wednesday fell nearly 5% 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 Rule Breakers, who scour everything from financial statements to trade magazines to clinical reports in their research, we're going to rely on our 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 outperform the S&P 500.

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

Company

No. of CAPS Ratings

Percent Bulls

5-Year Growth Estimate

Suntech Power (NYSE: STP  )

3,778

96.9%

37.6%

Manitowoc (NYSE: MTW  )

1,171

98%

32.3%

Quicksilver Resources (NYSE: KWK  )

616

98%

27.5%

Cognizant Technology (Nasdaq: CTSH  )

798

96.7%

26.2%

Core Laboratories (NYSE: CLB  )

476

97.9%

22%

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've got some great companies to work with. Cognizant Technology has been an aggressive buyer of its own shares. Manitowoc just shipped out its smallest and least profitable business. Quicksilver Resources is a five-star mover.

Here comes the Suntech
But this week's favorite can be found on our Rule Breakers scorecard: Suntech Power. The Chinese maker of equipment for channeling solar power, like peer Solarfun Power (Nasdaq: SOLF  ) , hasn't exactly been a source for white-hot returns lately.

"Suntech ... has dropped about 19% since last month, largely on concerns about solar panel sales in Spain. That's one of Suntech's major markets, and the Spanish government has discussed reducing subsidies in 2009. That's unlikely to happen, but the company has the backlog to make up for the loss even if it does," wrote Foolish colleague Karl Thiel recently.

And the numbers look good. Suntech trades for 17 times forward earnings, for a 0.70 PEG ratio. That's a good sign, as is its rising return on equity. But don't take my word for it: The market-thumpers at Vanguard Explorer (VEXPX) have been buying shares recently.

So has CAPS All-Star TMFSinchiruna. "I might be in the red on this one for a while, but this is a great company in a sector that makes just too much sense in a rising oil price environment," he wrote in March. "I believe solar will be a big part of the planet's solution to its energy woes, and China is th most de-coupled of all foreign economies... so I'm staying with [Suntech] for the long haul!!"

Agreed, but I'm more interested to know what you think. Would you buy Suntech Power 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!

Tim Beyers, who is ranked 18,642 out of more than 115,000 participants in CAPS, is a regular contributor to Fool.com. He didn't own shares in any of the companies mentioned in this article at the time of publication.

Tim seeks the best of the tech as a contributor to Motley Fool Rule Breakers, which counts Suntech Power among its holdings. Vanguard Explorer is a Champion Funds pick. Get access to all of Tim's writings here. The Motley Fool has a disclosure policy.


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