5 More Unloved Growth Stocks

Ah, skepticism, how I love thee.

We rebel investors at Motley Fool Rule Breakers believe the multibaggers in the making, while not often cheap by the numbers, are always misunderstood. As such, they face extraordinary skepticism, which, in turn, makes them excellent value stocks.

More are out there. Each week, right here in this column, we'll hunt them down. Grab your keyboard.

What one stock can do for you
Really, it's worth your time. One home run stock can make all the difference to your portfolio.

Just ask David Gardner, captain of the good pirate ship Rule Breakers, who bought Amazon at a split-adjusted price of $3.24 a share in 1997. He's up more than 2,300% since.

That helped him to overcome stinging losses from Guitar Center, Millennium Pharmaceuticals (NASDAQ:MLNM), and others to put up nine years of better than 20% average annual returns as the leader of the real-money Rule Breaker portfolio.

Let the haters be your friends
Today, David and his team still seek misunderstood growers. You can, too, with the help of our completely free-of-charge Motley Fool CAPS investor-intelligence database, which currently contains information on more than 4,900 stocks.

CAPS applies user input to rate stocks from one (low) to five (high) stars. Using CAPS, we're once again going to search for one- and two-star stocks that have at least 5% of their available shares sold short but are expected to grow their earnings by no less than 15% over each of the next five years.

Let's have the list
Now, with that preamble behind us, here are five unloved growth stocks:

Bear in mind that this isn't a list of recommendations. Instead, I offer these stocks as candidates for further research. But of these five, it's AK Steel and its rapidly rising returns on capital that interests me most.

Over the trailing 12 months, AK Steel has earned 21.2% returns on its deployed capital, yet its PEG ratio -- a measure of the stock's relative worth when compared to its expected earnings growth -- remains in deep-discount territory at 0.47.

Intrigued? Do your own due diligence and then check in with thousands of other investors at CAPS. And, if you'd like, add your own commentary. You'll be helping your fellow Fools and testing your ideas at the same time. Click here to get started now; the service is 100% free.

See you back here next week for five more unloved growth stocks.

Millennium Pharmaceuticals is a Rule Breakers recommendation. Ten stocks in the portfolio have more than doubled. Discover their identities with a 30-day guest pass to the service. There's no obligation to subscribe.

Tim Beyers, who is ranked 7,227 out of more than 60,000 participants in CAPS, is a regular contributor to Fool.com and Rule Breakers. Tim didn't own shares in any of the companies mentioned in this article at the time of publication. Click here for Tim's portfolio and here for his latest blog commentary. Amazon is a Stock Advisor pick. The Motley Fool's disclosure policy is your portfolio's competitive advantage.