Are you really a growth investor?

It's worth asking. Fast-moving tech stocks have taken a beating recently and have led 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 BE Aerospace (NASDAQ:BEAV), which on Tuesday fell more than 6% 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 Motley Fool Rule Breakers, who scour everything from financial statements to trade magazines to clinical reports in their research, we're going to focus just on our Motley Fool CAPS investor-intelligence database.

Specifically, we're looking for stocks that have earned a five-star rating in CAPS and that 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:


CAPS Rating (Out of 5)

Percent Bulls

5-Year Growth Estimate

Axsys Technologies (NASDAQ:AXYS)




T-3 Energy Services (NASDAQ:TTES)




Whiting Petroleum (NYSE:WLL)




Wonder Auto Tech. (NASDAQ:WATG)




Gilead Sciences (NASDAQ:GILD)




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 cheap growers to work with. Consider T-3 Energy Services, a former guest in this column and possessor of a mouthwatering 0.73 PEG ratio based on projected 2008 earnings.

Why so low? Growth. Analysts project that T-3 will expand its bottom line by at least 28% annually over the next several years. CAPS investor CynO1113 explained why in this pitch from Tuesday: "With very little capital investment in existing oil & gas wells in the last few years, the companies that are stepping up their exploration & drilling to meet the recent increase in demand for domestic oil & gas will need to upgrade current structures & build new ones in order to be competitive. With a customer base of some of the big dogs in the field, T-3 will see huge growth in demand for their services from these top players, which will translate into huge profits."

Wondering about Wonder
Interesting. My favorite, though, is Wonder Auto Technology, a micro-cap stock that penny-stock sleuth Tim Hanson first singled out in the pages of Motley Fool Hidden Gems. Quoting from his write-up in the December 2007 issue: "Wonder Auto manufactures starters and alternators for cars with small engines. ... By focusing on small engines, Wonder targets a significant portion of the market (28% of cars sold in China have engine capacities between 1.0 and 1.6 liters) without having to go head-to-head with multinational competitors that make parts for larger engines in more mature markets."

Even so, if Wonder ever does have to duke it out with Delphi or Visteon (NYSE:VC), it'll have an engaged management team ready for battle. Insiders own roughly 12% of the business, according to Capital IQ.

Others like the growth story at Wonder. Here's how CAPS All-Star ksnively put it in a detailed pitch from October:

They hope to augment future growth by expanding their export business, with an eye on Europe and the United States. Their acquisition of Jinzhou brings piston rods and shock absorber rods to their offerings, but more importantly … helps give them exposure to the United States market. Exports accounts for 5% of total revenue, which they expect to increase to 30% within 3 to 5 years.

And if that does happen? Look out.

But that's my take. I'm even more interested in what you think. Would you buy Wonder Auto Technology 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!