5 Stocks Geared for Growth

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 135,000-plus members think have the best chances of beating the market over the long haul.

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

Just because an analyst predicts that a company will feature fantastic growth opportunities, that 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, so let's see why the operations of some of these companies may or may not be held in high esteem by investors, considering that they appear to be sales and profit machines.

Tippling at the speakeasy
Rechristened as Mahindra Satyam, the one-time leading Indian outsourcing firm continues to put distance between its new operations and the scandal-scarred fraudulent ones of the company's founders. New executives continue to sift through the wreckage, but even with a few big losses in major accounts, Satyam looks as if it will come through the other side of the accounting scandal. New clients are signing contracts, such as GlaxoSmithKline (NYSE:GSK), which just inked a new, five-year deal.

CAPS member theinfamoushw says the changes under way are already noticeable and recognizes the merit behind Mahindra Satyam: "[D]espite its history of recording false profits, last quarter [Mahindra Satyam] was profitable and is still expanding and incredibly undervalued."

So Ralcorp, like Mahindra Satyam, has discovered that a rose by any other name would smell as sweet. Ralcorp is the nation's biggest maker of high-quality private-label cereals. It counts Wal-Mart Stores (NYSE:WMT) as one of its biggest customers and derives 17% of its revenue from the retailer. 

Although Ralcorp produces and sells private-label food products, CAPS member crazyhorse49 thinks that it can benefit from having leading supermarkets jump on the generic bandwagon. In 2008, $83 billion of retail sales were attributed to store brands, and those numbers continue to grow. However, Ralcorp also possesses a strong brand name because of its recent acquisition of Post Cereal, and now Ralcorp can profit in a variety of ways from shoppers who stretch their dollars.

Meanwhile, oil prices seem to be rising, and as long as exploration-and-production companies increase their capital spending projects, Atwood should reap some benefits. While capital spending hasn't been great recently, energy will always be in demand, and that's why oil-services companies like Atwood Oceanics will eventually recover.

CAPS member mccarthyconsultg believes that the depressed valuations Atwood currently trades at are an investor's ticket to future growth: "The business of Atwood Oceanic’s, Inc., subsidiaries is the exploration and development of oil and gas wells ... off the shores of Asia, Africa, India, Australia, the Mediterranean Sea. ... Over 90% of its revenues are earned overseas. Its stock is currently rated as a Buy by Market Edge, Jay Walk and Ford Equity Research. "

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. Head over to the completely free CAPS service, and let us hear what you have to say about these or any other stocks that you think should be on our dance cards.