5 More Top Growth Stocks

Are you really a growth investor?

It's worth asking. Fast-moving tech stocks have taken a beating recently, and those with the guts to buy have a slew of bargains to pick from. Just ask investors who hold shares of Valeant Pharmaceuticals (NYSE: VRX  ) , which yesterday fell nearly 7% on no news whatsoever. Sheesh.

No matter. 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

Mindray Medical (NYSE: MR  )

1,423

98.5%

36.1%

Atwood Oceanics (NYSE: ATW  )

1,642

99.1%

31.0%

CIRCOR International (NYSE: CIR  )

133

97.0%

26.5%

America Movil (NYSE: AMX  )

1,619

98.3%

22.8%

Smith International (NYSE: SII  )

508

96.9%

20.7%

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 have great companies to work with. CIRCOR is on the upswing, and Smith International is keeping up with the Joneses. America Movil is about to pop. And Atwood Oceanics is a dream stock for many growth investors.

A Mindray of hope in a manic market
My top pick, however, is Mindray Medical, a Chinese medical-device maker that's taken a beating from Mr. Market -- but for what? Outstanding performance? Revenue has risen by more than 60% over the past 12 months.

I don't know what the recessionistas are thinking in dumping shares of Mindray, Baidu.com (Nasdaq: BIDU  ) , and other Chinese stocks, but whatever it is, I'm not buying into the pessimism. Nor is our chief rebel, David Gardner, who has twice recommended the stock in the pages of Rule Breakers. From his latest write-up:

Here's a chance to gain international exposure -- and not just to China. Over the past 18 months, Mindray has gone from making most of its sales in China to more than 60% international sales, spread across more than 140 countries. The $83 billion U.S. market for medical devices accounts for less than 7% of Mindray's sales -- offering lots of room for growth.

But you wouldn't know that from the stock price. Mindray trades for about 21 times forward earnings -- quite a bit less than its expected 36% long-term earnings growth rate. To CAPS All-Star Murkyl, that's cheap. Quoting from our Fool's recent pitch:

Revenue, gross margin and operating margins are also very good. A small dividend is also nice to have. If the company grows well, so will the dividend, which is 20% of net sales.

Agreed, but I'm more interested in what you think. Would you buy Mindray Medical 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!

Fool contributor Tim Beyers recently returned from a tour of Silicon Valley with his Rule Breakers teammates, during which they visited more than a dozen established and emerging innovators. Care to learn more? Just tell us where to send you our updates. It's 100% free.

Atwood Oceanics is a Stock Advisor selection. Baidu.com and Mindray Medical are Rule Breakers recommendations. America Movil is a Global Gains pick. Tim didn't own shares in any of the companies mentioned in this article at the time of publication. The Motley Fool owns shares of Mindray Medical. Its disclosure policy last night met an investor who'd been diagnosed as terminally bearish. Such a sad story. (Sniff.)


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