More often than not, Wall Street's hot stocks flicker out as quickly as they ignite -- if they're flying high on nothing but hype, they're bound to cool off sooner or later. Which is why many investors favor growth stocks trading at reasonable valuations. With a history of strong earnings growth and profitability, combined with a reasonable valuation, a growth stock offers that nice slow burn that you just don't get from a flash in the pan.

The downside of investing in a growth company? Big growth companies can see a lot of stock price volatility. And they often have high P/E ratios -- meaning you may have to pay a premium in order to turn a profit.

So how can you identify growth companies trading at decent valuations? Following the smart money can be a good way to start. Institutional investors have the resources and expertise to sniff out growth companies that still have some upside -- so when these experts start snapping up stock, you may want to pay attention to what they're buying.

To help you do just that, here's a list of nine growth stocks seeing large institutional inflows over the past three months -- are they worth putting on your radar? (Click here to access free interactive tools to analyze these ideas.)

Company

Projected EPS Growth Over Next 5 Years

Shares Held by Inst. Investors Today

Shares Held by Inst. Investors 3 Months Ago

% Change in Inst. Ownership

DG FastChannel (Nasdaq: DGIT)

27.33%

30,337,621

27,172,262

11.65%

Western Refining (NYSE: WNR)

50.00%

38,385,769

34,966,175

9.78%

SuccessFactors (Nasdaq: SFSF)

27.50%

82,740,122

77,492,583

6.77%

Veeco Instruments (Nasdaq: VECO)

64.75%

47,493,640

44,903,270

5.77%

Rubicon Technology (Nasdaq: RBCN)

26.67%

29,225,968

27,984,785

4.44%

OYO Geospace (Nasdaq: OYOG)

37.00%

3,259,184

3,125,171

4.29%

Acme Packet (Nasdaq: APKT)

26.00%

51,794,178

49,675,327

4.27%

KIT digital (Nasdaq: KITD)

35.67%

14,283,746

13,733,238

4.01%

Riverbed Technology (Nasdaq: RVBD)

25.25%

66,633,946

64,479,282

3.34%

Projected earnings growth rates sourced from Finviz, institutional trading data sourced from Reuters.

Interactive Chart: Press Play to see how the market caps for all the stocks mentioned have changed over the last two years.


Kapitall's Eben Esterhuizen and Alicia Sellitti do not own shares of any companies mentioned.

OYO Geospace is a Motley Fool Hidden Gems pick. Try any of our Foolish newsletter services free for 30 days. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Motley Fool has a disclosure policy.