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.

Up, up, and away?
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 our 140,000-plus members think have the best chances of beating the market over the long haul.


3-Year Past Revenue Annual Growth

3-Year Past EPS Annual Growth

Est. 2-Year Future EPS Growth

Est. 2-Year Future Revenue Growth

CAPS Rating (out of 5)

Allegiant Travel (NASDAQ:ALGT)






Almost Family (NASDAQ:AFAM)






HQ Sustainable Maritime






Phase Forward (NASDAQ:PFWD)






Tessera Technologies (NASDAQ:TSRA)






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

Analysts' predictions of fantastic growth opportunities don't always become reality. But Wall Street's preferred picks do offer an excellent starting place for your own research into extreme buying opportunities. Let's see why some of these companies may draw investors' ire, or rev their enthusiasm.

Patently powerful
It's nice to be holding all the cards. In May, the International Trade Commission ruled that Tessera Technologies' patents were valid, but said the chip miniaturization company hadn't brought enough evidence to show they were infringed. Still, it did impose a limited exclusion order that blocked the importation of chips from Qualcomm (NASDAQ:QCOM), Freescale, and Spansion. Just last month, an appeals court rejected a motion to lift that import ban.

Right now, it's tough to judge the ban's impact. However, one Freescale chip used in the manufacture of Amazon.com's (NASDAQ:AMZN) Kindle e-book reader is no longer available. Qualcomm has tried to get around the ban by sloughing off some packaging operations to Amkor Technology (NASDAQ:AMKR), which has a license from Tessera. But Tessera isn't having any of it, and says Amkor risks its license agreement by accepting the business.

CAPS member SemiChamp thinks Tessera's potent patent portfolio sets it apart: "Strong IP position and knows how to effectively run an IP business model. Building strong position in camera/lens IP for mobile apps."

The legal wrangling is a multipronged effort on both sides of the debate. The other chipmakers are challenging the patents' validity in the patent office itself. So far, the agency has rejected two of Tessera's patents after reexamining them, though Tessera has appealed the decision. The outcome of these maneuvers is serious for all involved. According to Tessera, the infringing chips include ATI cell phone chips, Freescale chips used in various Wi-Fi devices, and Spansion memory chips included in numerous consumer electronics products.

Business is good for Tessera, though. It recently raised revenue guidance by as much as 10% for the third quarter, as the semiconductor industry enjoys a bit of a bounce from increased demand.

It pays to do your research ...
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 tell us which stocks most deserve a spot on our dance cards.

Amazon.com is a Motley Fool Stock Advisor selection. Almost Family is a Motley Fool Hidden Gems recommendation. Try any of our Foolish newsletter services 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.