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 LookSmart (Nasdaq: LOOK  ) , which on Wednesday fell more than 4% 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 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

Metalico (AMEX: MEA  )

1,066

97.5%

53.5%

Clean Energy Fuels (Nasdaq: CLNE  )

587

97%

27.5%

Heartland Payment Systems (NYSE: HPY  )

325

96.3%

20.9%

NYSE Euronext (NYSE: NYX  )

2,270

96.7%

20.2%

II-VI (Nasdaq: IIVI  )

1,226

98.3%

20%

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 some great companies to work with. II-VI and Heartland Payment Systems are Motley Fool Hidden Gems recommendations. Clean Energy Fuels is a five-star mover. Metalico is a small-cap scrapper.

Don't exchange this exchange
But, once again, I'm going with Rule Breakers recommendation NYSE Euronext. I agree with CAPS investor smith972, who wrote earlier this week, "Too deep of a correction. I believe this is the bottom. We will see."

Correction? More like depression, for every owner of NYSE Euronext shares. On Tuesday, the stock hit a new 52-week low of $37.36 after analyst Richard Repetto of Sandler O'Neill & Partners said volume is down in all exchanges except for one: Climate Exchange.

Never heard of it? Me neither. Turns out it passes gas. Literally. Climate Exchange is a trading platform that financially rewards firms that reduce their greenhouse gas emissions. I can't imagine NYSE Euronext managing a similar business, but the point remains: Exchanges are relatively easy to create, especially in this digital era.

Still, mom-and-pop exchanges aren't about to put NYSE Euronext or Nasdaq OMX Group (Nasdaq: NDAQ  ) out of business. These established firms can bring more liquidity to private enterprises hoping to come public. As Foolish colleague Matt Koppenheffer put it recently:

To the bulls, NYSE is the Coca-Cola of the stock market exchange picture. Sure, Nasdaq may be the Pepsi to NYSE's Coke, but that makes BATS what? Ginger ale? Dr Pepper? We all know someone that drinks ginger ale, but let's be serious, it's never going to unseat Coke.

Agreed, but I'm more interested to know what you think. Would you buy NYSE Euronext 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 19,380 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 tech as a contributor to Motley Fool Rule Breakers, which counts NYSE Euronext among its holdings. II-VI Inc. and Heartland Payment Systems are Hidden Gems picks. Coca-Cola and Nasdaq are Inside Value picks. Get access to all of Tim's writings here. The Motley Fool has a disclosure policy.


Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 716582, ~/Articles/ArticleHandler.aspx, 9/22/2014 8:22:29 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement