As I'm a member of the Rule Breakers newsletter team, few will confuse me for a deep value investor. I prefer turnover to turnarounds. I define the C in DCF as "catalysts." I find more investing ideas going over lists of heavily shorted stocks than those hitting fresh 52-week lows.

Despite all this, I am no spendthrift. I am passionately cheap. The catch is that I see great prices in growth stocks. I think that's important. Value investors may have been jumping all over real estate developers last summer, when they seemed to be trading at single-digit P/E multiples. What happened? Earnings crashed, multiples expanded, and homebuilder stocks fell even further.

I prefer to hitch my portfolio's wagon to stocks that are growing. You can try your luck at nailing the top and bottom of cyclical stocks. I won't. Why should I, when there are just way too many bargains out there from stocks that have consistently delivered the goods?

Five for the road
Now that the 2006 earnings season is shrinking in the rearview mirror, investors are looking ahead to 2007 growth projections. More important, we're now getting forward estimates for fiscal 2008.

Let me run a few names past you. Tell me if you thought they were trading for higher forward multiples than they actually are.

Recent Price

2008 EPS

2008 P/E

Akamai Technologies (NASDAQ:AKAM)




Hansen Natural (NASDAQ:HANS)




Research In Motion (NASDAQ:RIMM)








aQuantive (NASDAQ:AQNT)




Data from Yahoo! Finance.

Finding growth stocks with 2008 profit multiples running less than 30 may not seem cheap at first glance, but dig a little deeper to appreciate what some of these companies are doing.

Akamai is the market leader in providing speedy and secure content delivery, and that is only going to grow in demand in our digital media future. Hansen scored a winner with its Monster energy drink, and now it's hoping to cash in on that shelf-space respect by rolling out new products. Research In Motion is the company that has turned the BlackBerry into a fruit-bearing cash tree. aQuantive is giving companies an online marketing presence, which is only going to grow in time.

Then we have Expedia. You may not be a big fan of online travel stocks. I hear you. Overseas players like (NASDAQ:CTRP) are growing faster. Many travel providers such as Southwest (NYSE:LUV) are getting crafty about making a direct connection with the consumer (and don't tell me you don't get giddy when your computer "dings" with a new last-minute Southwest deal).

However, Expedia has a strong brand and some skin in the Web 2.0 game, with its addictive trip-planning site Despite some hiccups in the past, it is every inch a growth stock. Even better, you can buy in at less than 16 times next year's earnings.

I'm sorry. That's affordable.

Buying the right kind of growth stock
The companies that I consider -- heck, demand to be considered -- cheap are growing at incredible rates, yet they're priced as if they were only modestly above average. They also have a history of blowing past analyst profit targets, so the forward-looking estimates have a pretty good chance of being revised higher in the coming quarters.

That's where I want to be. Yes, Rule Breakers is a growth stock newsletter service. Dig deep into the scorecard and you will find:

  • A fast-growing Chinese leisure dynamo, trading for less than 20 times this year's earnings.
  • An airport security specialist fetching just 20 times forward profitability.
  • Two of the five stocks that I mentioned earlier -- aQuantive and Akamai -- that continue to have a bright future and do, in fact, look cheap in my book.

Growth stocks are the greatest value stocks I know. Remember when Google went public at $85 in the summer of 2004? Did you think it was overpriced at the time? If so, you weren't alone.

But no one knew that the company was positioning itself to earn $18.45 per share come 2008. Those who got into Google early snapped up a stake in the paid search giant for just 4.6 times next year's profits.

Getting in early on the right growth stocks is the key. Just your luck -- the growth-stock kissing booth doesn't seem to have much of a line these days. Pucker up, my friend.

Intuitive Surgical is a Rule Breakers pick. If you want to unearth the other "potentially cheap" stocks in the newsletter, punch in now for a free 30-day trial offer.

This article was originally published on Feb. 15, 2007. It has been updated.

Longtime Fool contributor Rick Munarriz does not own shares in any of the companies mentioned in this story, even though he recognizes that nearly all of the 50 states ban marriage between a man and a stock. Rick is part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. is a Motley Fool Hidden Gems recommendation. The Fool has a disclosure policy.