Are you really a growth investor?

It's worth asking. Even though talk of a growth stock rally has spread to the pages of The Wall Street Journal, investing in fast movers can be a stomach-churning experience.

Yesterday offers a good example. Fears that the Federal Reserve wouldn't take further action to contain damage arising from a credit crunch sent stocks reeling. Yet unrelated tech shares also paid a price.

Witness wireless networking specialist Clearwire (NASDAQ:CLWR), which was down nearly 7% on no news whatsoever. Surprised? Don't be. Market panics occur daily. That's why all-star investors bet on growth over the very long term. They know that:

  1. Businesses that make investors billions always begin as growth stocks.
  2. The best of them feature massive and identifiable competitive advantages.
  3. Growth as a strategy has the capacity to deliver 20% or greater annual returns for decades at a time.

How we do it
Of course, not all growth stocks will do. Our weekly hunt is for the next great multibagger. But unlike David Gardner and his team at Motley Fool Rule Breakers, who scour everything from financial statements to trade magazines to clinical reports in their research, we're going to rely on our Motley Fool CAPS investor-intelligence database.

Specifically, we're looking for stocks that have earned a five-star rating in CAPS and which are expected to grow their earnings by at least 20% annually over the next five years. Five-star stocks are those that the community, on the whole, believes will outperform the S&P 500.

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


No. of CAPS Ratings

Bullish CAPS Ratings

5-Year Growth Estimate

Health Grades (NASDAQ:HGRD)




Anika Therapeutics (NASDAQ:ANIK)




The9 Limited (NASDAQ:NCTY)




SumTotal Systems (NASDAQ:SUMT)




Omrix Biopharmaceuticals (NASDAQ:OMRI)




Source: Motley Fool CAPS, Yahoo! Finance

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 The9, which hosts the wildly popular World of Warcraft online role-playing game in China, that interests me most.

Why? First, the stock is being punished for making smart infrastructure investments that temporarily stunted growth during the quarter. Second, The9's long-term opportunity is massive. Here's how CAPS All-Star TheGarcipian describes it:

Imagine World of Warcraft on steroids but you still can't a get good handle on what [The9] is all about. Throw in more online RPGs (role playing games) like Guild Wars, Ragnarok, Hellgate: London, and a handful of others, but you still won't get the entire picture. Not until you throw in the big Feng Shui factor: there are potentially 4x-6x more Chinese adolescents and twenty-somethings that adore these games than in the USA. And they will be playing them online with their friends over networks run by the likes of The9.

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 top growth stocks.

Tim Beyers, who is ranked 7,927 out of more than 60,000 participants in CAPS, is a regular contributor to and Rule Breakers. Tim didn't own shares in any of the companies mentioned in this article at the time of publication. Omrix Biopharmaceuticals is a Rule Breakers recommendation. The Motley Fool's disclosure policy is your portfolio's competitive advantage.