Are you really a growth investor?

It's worth asking. Fast-moving tech stocks have taken a beating recently, leading to a slew of bargains for those with the guts to buy.

No surprises there. Market panics occur daily. Just ask investors who hold shares of EMC (NYSE: EMC), which on Tuesday reported excellent earnings, only to see its stock fall 6%. The reason? Subsidiary VMWare failed to impress Wall Street. Sheesh.

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

Northgate Minerals (AMEX: NXG)




National Oilwell Varco (NYSE: NOV)




China Fire & Security (Nasdaq: CFSG)




Core Laboratories (NYSE: CLB)




Sigma Designs (Nasdaq: SIGM)




Sources: 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.

At first, Sigma Designs, an active and well-performing Rule Breakers pick, tempted me. Why? As with last week's guest, Silicon Image (Nasdaq: SIMG), Sigma stands to profit from the inevitability of high-definition media -- but for different reasons. Sigma's chips are making their way into boxes that help deliver Internet signals to TVs. Intriguing, yes?

Journey to the core
I'll say, but my pick for today is Core Laboratories, which specializes in extracting oil from tough-to-reach spots. CAPS All-Star timefordough explains why this matters:

Oil companies can no longer leave large percentages of a well in the ground. Core Labs can improve recovery by almost 40%. This is a long-term story and with limited competition [Core Laboratories] can expect sustained growth for quite some time. [Core Labs] is currently oversold and has not participated in the current rally. This is a great buying opportunity.

I agree. And I'll add that Core's returns on equity and capital have risen dramatically in recent years to 85.6% and 29.6%, respectively, over the trailing 12 months. Margins have also increased, yet the stock's valuation still looks attractive.

But that's my take. What's yours? Would you buy Core Labs at today's prices? Let us know by signing up for CAPS today. It's 100% free to participate.

See you back here next week with five more top growth stocks. Fool on!

Tim Beyers, who is ranked 12,337 out of more than 83,000 participants in CAPS, is a regular contributor to and Rule Breakers, which includes Sigma Designs in its market-beating portfolio.

Tim didn't own shares in any of the companies mentioned in this article at the time of publication. Find Tim's portfolio here and his latest blog commentary here. The Motley Fool's disclosure policy is your portfolio's competitive advantage.