The other day, I ran across a list of the S&P 500 companies with the highest estimated long-term growth rates. Compiled by Paul Hickey and Justin Walters of the Bespoke Investment Group, it featured a bunch of familiar names, along with some companies unknown to me. Here are a few samples:

Company

Industry

Est. Growth Rate

Celgene (NASDAQ:CELG)

Health care

55%

Cognizant Tech. (NASDAQ:CTSH)

Technology

35%

Google (NASDAQ:GOOG)

Technology

30%

Monsanto (NYSE:MON)

Materials

28%

Amazon.com (NASDAQ:AMZN)

Consumer Discretionary

23%

Coach (NYSE:COH)

Consumer Discretionary

22%

eBay (NASDAQ:EBAY)

Technology

20%

Source: Bespoke Investment Group.

Here are a few things that came to mind as I perused the list:

  • It's not all about technology. Monsanto, for example, is an agricultural company. Here's how it describes itself: "Today, we produce leading seed brands in large-acre crops like corn, cotton, and oilseeds (soybeans and canola), as well as small-acre crops like vegetables. We also produce leading in-the-seed trait technologies for farmers that are aimed at protecting their yield, supporting their on-farm efficiency and reducing their on-farm costs." A lesson here is not to look just in some expected corners for growth -- it can happen anywhere. Think about the amazing growth of Hansen Natural over the past decade, for example -- in beverages. And about Coach, which is in the business of making apparel accessories, such as leather handbags and briefcases.

  • Technology isn't a very clear industry description. That's because these days, it's hard to find a company that isn't involved in technology. It's not just hardware and software makers. Big retailers use it to keep track of their processes, banks use it to facilitate transactions, and even agricultural companies such as Monsanto use technologies to produce better and new products.

  • If you think about it, you might have been able to predict some of the companies on such a list. Think, for example, about the growing trend among companies to outsource many parts of their businesses, including technological jobs. If you don't expect that trend to wither any time soon, you might do well to look for companies profiting from it, such as Cognizant Technologies. Its stock has already grown at an annualized 57% over the past nine years, making it a 56-bagger.

  • Think, too, about companies you know rather well and whose products and services you use. (It helps if many people you know also use them.) Google might fit this bill -- it's an example of a company with a lot of growth potential, and as a user over the years, you might have grown convinced of its potential as it unveiled new initiative after new initiative. For example, it has launched Google Maps and Google News, and has purchased YouTube. It has kept refining and improving its search capabilities, too. (Of course, not everything is a resounding success. Google Finance, for example, hasn't become a major hit.) eBay is another example. Once you become a user, it's easy to see the company's power. Its sheer size and population make it compelling for anyone who wants to sell, and buy. Its size makes it hard for any new entrants to compete with it, too.

What to do
So now that you have this list, should you snap up shares of these companies, or companies like them? Not necessarily. They may have steep expected annual growth rates, but remember: Expected growth is far from guaranteed growth. Every public company faces various risks and won't necessarily perform as its management or investors expect.

You can get an idea of some risks faced by some companies by reading their 10-K reports, which are filed with the SEC. Here are some risks I found for some of the above companies:

  • Monsanto: "Our competitors' success [in plant biotechnology and breeding research, and their speed in getting new products to market] could render our existing products less competitive, resulting in reduced sales compared to our expectations or past results." And: "...we may be unable to obtain protection for our intellectual property in key jurisdictions."

  • Coach: "There is a risk that our competitors may develop new products that are more popular with our customers. We may be unable to anticipate the timing and scale of such product introductions by competitors, which could harm our business."

  • Cognizant: "In recent years, there have been military confrontations between India and Pakistan that have occurred in the region of Kashmir and along the Indian-Pakistan border.... If India were to become engaged in armed hostilities... our operations would be materially adversely affected. In addition, U.S. companies may decline to contract with us for services in light of international terrorist incidents or armed hostilities even where India is not involved because of more generalized concerns about relying on a service provider utilizing international resources."

You get the idea, I think. So go ahead and peruse lists of exciting, fast-growing companies. But don't invest in them without doing a lot of research, first.

And if you don't have the time or interest for much research, let us help you by doing much of it for you. I invite you to test-drive, for free, our Motley Fool Hidden Gems newsletter, which delivers promising investment ideas monthly. Its picks are more than doubling the market by an average of about 54% to 20%, and it's where I've gotten a bunch of great investment ideas, myself.

Longtime Fool contributor Selena Maranjian owns shares of eBay. Amazon.com and eBay are Motley Fool Stock Advisor recommendations. Try any of our investing services free for 30 days. The Motley Fool is Fools writing for Fools.