5 Top Tweeners

If you've ever sought to get seriously rich from stocks, then you've owned a tweener.

A tweener, dear Fool, is like your pal Chuck. Still a great athlete, Chuck no longer rules the hardwood with his 40-inch vertical leap. He's become what we sports addicts call a gamer. He passes more. He's developed a nice shot from the corner. And, though he doesn't dunk as much, or as spectacularly, as he did, Chuck is still a force in the paint.

What we fans don't know is how long Chuck will be in the starting lineup. Chiseled veteran Abe has a wicked hook shot that won't quit. And Larry, the little guard whose hip-shaking moves smoke defenders, has the makings of a future superstar. Both are vying to cut into Chuck's minutes on the floor.

In Foolish parlance: Chuck is a tweener, Abe is a Rule Maker, and Larry is a Rule Breaker.

Growing up is hard to do
The stock market has plenty of Chucks. They'll either create billion-dollar fortunes as they come to dominate industries, as Cisco (NASDAQ:CSCO) and Microsoft have, or they'll be destroyed in the process, as Gateway was.

Therein lies the problem. Investing in tweeners can be dangerous and  exceptionally profitable -- the trick is picking your winners well, as David Gardner has. He produced nine years of 20% average returns hunting for misunderstood multibaggers in the making. His team at Motley Fool Rule Breakers continues the tradition today.

Let's have the list
You, too, can join in the effort, thanks to Motley Fool CAPS. Each week, we'll use the database to find three-star stocks that are expected to boost earnings by at least 15% annually over the next five years. Here is today's list:

Bear in mind that this isn't a list of recommendations. Instead, I offer these stocks as candidates for further research.

Of these five, you'd think that a tech-toting growth grabber like me would be first in line to buy shares of data networking specialist Juniper. Wrong. As interesting as this business is, it's nowhere near the leader in its core market. That's Cisco, which, at 22 times trailing earnings, is considered to be more than 50% cheaper than its junior rival.

Did you save room for dessert?
But enough about tech. Today's top tweener is a study in simple pleasures. Pleasures like dessert. May I seat you now, Mr. Investor? Your dining companion, Cheesecake Factory, has already arrived.

How about an appetizer to start? You might find this third-quarter report, cooked up by fellow Fool Billy Fisher, to be particularly succulent:

Third-quarter revenue grew 15.4%, aided by the opening of six new Cheesecake Factory locations and one new Grand Lux Cafe. Efficient labor-cost management helped offset higher input costs, leading to earnings per share growth of 13%. Menu price increases helped same-store sales inch up 1.2%.

For our main course, I've selected some comparisons to peers in the casual-dining segment. Notice the above-average margins:

What's that? Your side dish of ROC wasn't much to your liking? No problem, I'll take it off the bill; I hope you'll accept the chef's apologies. He tells me that ROC is a little undercooked now but should improve as growth moderates and management focuses on squeezing more out of the high-margin menu at its existing locations.

Finally, for dessert, allow me to present CAPS investor Tabasco199 and his recipe for success with Cheesecake Factory:

Best of breed pick. Restaurants almost always packed. Growth potential is vast ... and this is about as good a price as you'll get on a quality one that is growing fast. Will experience some profit decline short-term due to increased costs, but I think these are temporary and already factored into the price.

Tasty, yes? I'd say so. But don't take my word for it. 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 tweeners.