Before I became a full-time employee here at the Fool, I visited the site on a regular basis. Back then, I wasn't much of a discussion board guy, and my attention span was too fleeting to read about the four different ways to calculate returns on invested capital.
No, I visited the site for one main reason: I wanted stock ideas. For like-minded readers everywhere, I thought I'd offer up three attractive selections from our Motley Fool Rule Breakers investment service. Thus far, Rule Breakers has 17 official recommendations (with two more to be unveiled tomorrow). Here are three I find particularly interesting (in alphabetical order):
Blue Nile
Apart from the lingerie section of a department store, the jewelry shop has to be one of the more stressful places for most men. "Excuse me, sir, can I help you?" the lady asks. "Um, do you have any wedding rings here for, say, less than $1,000?" you reply. At that point the security guard comes and escorts you to the curb.
Blue Nile, the Internet's leading retailer of diamonds and fine jewelry, has changed all that. More than 50,000 couples have purchased their engagement and wedding rings from the company, and now guys can hunt for that special ring without being strong-armed by that overly perfumed lady with the hair that doesn't move.
By dealing directly with suppliers, Blue Nile can offer discounts up to 40% off normal retail. It then offers MBNA as a finance partner, Chubb for insurance, complimentary FedEx overnight delivery, and a 30-day money-back guarantee. And if you're too nervous, they'll even pop the question for you.
The company, which went public just last year, recently announced that earnings were up 37% and sales were up 23% for the first quarter. It also has positive free cash flows and very little debt. Analysts estimate that the company will grow by 30% annually over the next five years.
Blue Nile is a classic Rule Breaker. It is top dog and the first mover in the emerging market of online jewelry. It has excellent management, and Wall Street thinks it's overpriced. With just a 2.9% share of the U.S. engagement ring market, the company has plenty of room for growth. Since Motley Fool Co-Founder David Gardner, our lead analyst at Rule Breakers, selected the company back in October, Blue Nile's shares are down 1.25%.
Intuitive Surgical
At Rule Breakers, we like to back leaders in emerging industries. Intuitive Surgical is not only a leader in the field of robotic surgical devices, it is the only player of significance at the moment. While Wall Street sneers at the company's price-to-earnings ratio (P/E) of 52, we're intrigued by its annual growth rate of 45%.
Intuitive Surgical makes da Vinci robots, which perform tiny, precise cuts and sutures that surgeons can't. Traditional surgeons manipulate controls on a console that make the robot perform the correct procedures. This revolution in minimally invasive surgery is transforming the medical world as we speak. Years from now, many of us may find ourselves at the mercy of one of these robots -- and I think we'll be grateful for the benefits of these robots, including improved survival rates, less pain, shorter recovery time, and smaller scars.
The company's sales soared more than 54% during the most recent quarter. So far, it is at approximately 10% market penetration, so there is room to grow here. Shares of Intuitive Surgical are up 7% since Rule Breakers recommended it in April.
Shanda Interactive
Imagine this business model: You provide an online game service where players pay money to assume roles in a virtual world. The experience is improved as more people join, and once the game is set up, your margins fatten considerably. Oh yeah, and the business is located in the most populated country in the world.
That's Shanda's business model in a nutshell. It is the No. 1 purveyor of massively multiplayer online role-playing games in China. Massively what? Trust me, it's a gold mine. Shanda's revenues shot up 118% and net income rocketed up 206% during the most recent quarter. Margins remained stellar.
Despite these impressive numbers, Shanda shares are down 7% since the company was recommended to Rule Breakers subscribers in January. Shanda faces stiff competition from the likes of Sina
Many great companies, such as eBay
There's more where that came from
So there they are: three attractive growth stocks to consider for your portfolio. If these companies interest you and you'd like to read about them in greater depth, join us for a free 30-day trial to Motley Fool Rule Breakers. You'll find in-depth reports on the three stocks mentioned above as well as the 14 other official recommendations. And, oh yeah, if you sign up today, you'll receive our two newest picks tomorrow -- hot off the presses. The trial requires no obligation on your part. If you don't like what you see, just cancel at anytime. Click here to learn more.
John Reeves owns shares in Sina. Sina, eBay, and Electronic Arts are Motley Fool Stock Advisor recommendations. The Motley Fool has adisclosure policy.
