5 Growing Stocks to Keep Your Port Going

A stock's price follows its earnings, which in turn follow its sales. A company needs only to take care of its business for investors to profit in the long run.

With that in mind, examining companies whose revenues and profits are rising -- and which inspire analysts' confidence in continued future growth -- should give us a fertile field in which to discover solid candidates for long-term outperformance.

The roaring 20s
Below are a handful of companies that have enjoyed 20% or more annual growth in sales and earnings over the past three years, and for which analysts forecast total growth of 20% or more over the next two years. We'll then pair up those predictions with the community stock research at Motley Fool CAPS, to get an idea of which companies the 130,000-plus members think have the best chances of beating the market over the long haul.

Company

3-Year EPS Annual Growth

3-Year Rev. Annual Growth

Est. 2-Year EPS Growth

Est. 2-Year Rev Growth

CAPS Rating (out of 5)

Amazon.com (Nasdaq: AMZN  )

26%

31%

34%

37%

**

Baidu (Nasdaq: BIDU  )

139%

103%

75%

88%

***

Celgene (Nasdaq: CELG  )

85%

58%

70%

40%

****

Monsanto (NYSE: MON  )

75%

21%

46%

25%

****

Research In Motion (Nasdaq: RIMM  )

73%

75%

35%

61%

**

Source: Capital IQ, a division of Standard & Poor's; Motley Fool CAPS.

Just because an analyst predicts that a company will feature fantastic growth opportunities doesn't mean those predictions will become reality. But their preferred picks do offer an excellent starting place for your own research into extreme buying opportunities.

Tippling at the speakeasy
Being a first-mover can offer distinct competitive advantages for a company, but it's not essential to ultimately win the battle for consumers' hearts and wallets. Locating businesses that seize an edge and then exploit that advantage has been a key component of picking winning investments at Motley Fool Rule Breakers.

Amazon.com seems to have done exactly that -- again -- with its Kindle e-book reader. From the interest generated by the original reader to the hoopla surrounding its latest version, you'd be forgiven if you thought Amazon had created the e-book-reader market. In fact, it's late to the party. The first models hit the market in the late 1990s, and a handful of companies like Sony (NYSE: SNE  ) were producing readers before Amazon. Yet none has made curling up with a good e-book so successful. The original Kindle is Amazon's top-selling gadget, while the new DX model is already the second-best seller.

Investors know a real page-turner when they see one. While top-rated CAPS All-Star BigFatBEAR is steadfastly, er, bearish, thinking that now might be a good time to take profits, TurtleField takes a more optimistic approach:

Kindle is opening a whole new market. Friends have already purchased $100 worth of books. Great for travel.

SureShoe agrees, highlighting Amazon's greatest competitive moat:

This company owns Internet retail. Sure, there are a lot of individual retailers, but there are no other online competitors with the size, scope, and recognition of Amazon. Let's say you're going to buy something online and want to check the price - what is the first site you check? The answer = amazon.com. That my friends is a moat. Couple that with great management and this horse is going to keep running for the foreseeable future. The valuation is there.

Flapping your gums
The same thing could be said about Research In Motion and its BlackBerry: It wasn't the first to market, but it captured large swaths of mindshare. Yet where Amazon has been able to fend off newcomers, RIM has watched Apple (Nasdaq: AAPL  ) and others carve up the smartphone market. RIM remains a top-tier player in what has become a very crowded space. The analysts at Strategy Analytics forecast that Google's Android will become the fastest-growing mobile OS. Of course, its expected installation on 8 million handsets would still represent only one-third of the 23.5 million BlackBerries that Research In Motion sold in 2008 alone.

Though RIM's Storm phone already upset the iPhone as a top seller in the first quarter, CAPS All-Star GKuhfeldt believes the best is yet to come:

Everyone knows that the Blackberry Storm was a HUGE disappointment to general consumers, let alone regular Blackberry users. The Storm was rushed to market despite glitches that ranged from sluggish performance to a poor typing interface. However, there is hope. Research in Motion co-CEO, Jim Balsillie, has confirmed that [RIM] is "working on next-generation devices in the hopes of continuing to tap into the consumer market."

No Great Depression
It pays to start your own research on these stocks on Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made, all from a stock's CAPS page. Why not head over to the completely free CAPS service and let us hear what you've got to say about these, or any other stocks that might merit a spot on our dance card?

Baidu is a Rule Breakers pick. Apple and Amazon are Stock Advisor recommendations. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.


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