Color to the Numbers: Top Hypergrowth Stocks

Financial websites have given investors more tools than ever to screen the markets for stock ideas. But those screens provide only the raw numbers -- not the stories behind them. What looks like the start of a trend could be merely a one-time blip.

Let's enlist Motley Fool CAPS to color in the outlines these numbers create.

To find the cream of the crop of hypergrowth stocks -- those combining strong revenue and earnings growth -- we'll screen for stocks with:

• A market cap of at least $100 million.
• A trailing compound annual revenue growth rate of at least 20%.
• A trailing compound annual earnings-per-share growth rate of at least 50%.
• A projected five-year EPS growth rate of at least 20%.
• Net profit margins of at least 10% for the trailing 12 months.

Then we'll tap the collective intelligence of our 79,000-plus CAPS investors to see whether these companies present real opportunities -- or are priced beyond reason.

Opinions with the numbers
Here's a sampling from the list of stocks our screen pulled up today.

Fitting in
Some companies enjoy industries that are relatively stable and slow to change, but fashion retailers such as Urban Outfitters have no such luxury. You have to be nimble to succeed in a business where the line between unabashed success and dismal failure is as thin as the daily whims of hormone-pumped teens. But over the long haul, Urban Outfitters has shown that it's able to successfully navigate fashion gyrations to deliver exceptional returns for investors.

Growth from new franchises Anthropologie and Free People has helped Urban Outfitters keep pace with alternatives from Abercrombie & Fitch and bebe stores. And even when the company has missed fashion trends, management has shown that it can move quickly to correct course while more stodgy retailers such as Gap (NYSE:GPS) continue to struggle.

The CAPS community is divided on the prospects of Urban Outfitters, though, with many of those bearish on the company citing its high earnings multiple of 32. But with plenty of room to expand beyond the current 230 stores and its strong earnings growth trend, 99 of 115 CAPS All-Stars are voting for the company to outpace the S&P going forward.

If the shoe fits ...
And if you thought building a sustainable business on major fashion trends in clothing and accessories is tough, consider the companies that focus solely on footwear for their bread and butter. Deckers Outdoor is one of several players that has done more right than wrong over the past five years, with its stock having increased almost fiftyfold.

Stock in Deckers continues to fly, bolstered by the continued success of its Ugg sheepskin boot line, which showed 65% sales growth in the most recent quarter. As a longtime surfer, I've been familiar with Uggs since the early '80s, when they became popular in the California surf culture. Seeing them on the feet of tweens, teens, and even pregnant moms these days tells me that while the sheepskin actually makes an incredible boot, the mainstream popularity of the line has reached its peak.

Some CAPS investors also believe Deckers has more to lose than gain at this point. More than 23% of investors who rated the company in CAPS give it a thumbs-down. But Deckers has continued to answer the pessimists with profits for premium footwear, and even with a current earnings multiple of 49, a larger proportion of CAPS All-Stars -- 122 of the 140 who have rated the company -- are bullish.

Let 79,000 investors be the judge
The collective wisdom of a huge pool of investors quickly adds color to a whitewashed page of numbers. But even with an entire community of qualified opinions acting as the judge, individual investors are still the jury and should perform their own research.

Want to see your favorite screen results run through the CAPS wringer? It's free to tap the knowledge base and even give your own opinion in Motley Fool CAPS.