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 ValueClick (Nasdaq: VCLK), which fell more than 4% on Tuesday on no news whatsoever. 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

Percent Bulls

5-Year Growth Estimate

Dril-Quip (NYSE: DRQ)




America Movil (NYSE: AMX)




Quidel (Nasdaq: QDEL)




General Cable (NYSE: BGC)




Taiwan Semiconductor (NYSE: TSM)




Sources: Motley Fool CAPS, Capital IQ (a division of Standard & Poor's), and 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, I was tempted to go with Latin American mobile operator America Movil, which gets extremely high marks from some of our best CAPS investors. More than 99% of the 550-plus All-Stars to rate the stock give it a thumbs-up. One of them, hondo928, best explained why in November:

This monster of a company should steadily outperform, a P/E of 22 for such a heavy growth company, is a great deal, not to mention a solid dividend. This company is almost the size of Verizon and fundamentally extremely similar -- the difference being they are in emerging markets with heavy growth; 141 Million subscribers is only scratching the surface.

Really? If so, wow.

And yet my pick for today is a stock that I already own: Taiwan Semiconductor (TSMC), also known as the world's largest manufacturer of chips. Not a designer, but a manufacturer.

The distinction is important. Most of the world's chip designers aren't like Intel (Nasdaq: INTC), which builds and maintains its own facilities, commonly known as foundries. ARM Holdings is a good example. It relies on TSMC to produce a large number of its designs.

And ARM isn't alone. As Foolish colleague Anders Bylund rightly points out here, Taiwan Semiconductor last year booked more revenue than all three of its next closest competitors combined.

In short: As Intel is to designing and manufacturing PC microprocessors, Taiwan Semi is to manufacturing ... just about every other kind of electronic brain out there.

How can a company that well-positioned be trading for a fraction of its long-term projected growth? But that's what we have with TSMC -- its 0.64 PEG ratio is the result of trading for less than 13 times next year's earnings.

I own shares today because I believe that's too cheap a multiple. But that's me. What about you? Would you buy Taiwan Semiconductor 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 13,442 out of more than 83,000 participants in CAPS, is a regular contributor to and Rule Breakers. Intel is an Inside Value pick. ARM Holdings is a Stock Advisor selection.

Tim owned shares of Taiwan Semiconductor 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.