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 American Superconductor
That's why all-star investors bet on growth over the very long term. They know that:
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Businesses that make investors billions always begin as growth stocks.
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The best of them feature massive and identifiable competitive advantages.
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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:
|
Company |
No. of CAPS Ratings |
Percent Bulls |
5-Year Growth Estimate |
|---|---|---|---|
|
Suntech Power |
***** |
96.7% |
35.8% |
|
NII Holdings |
***** |
96.3% |
29.8% |
|
Cameron International |
***** |
97.5% |
24.7% |
|
Nasdaq OMX |
***** |
96.5% |
22.4% |
|
Quicksilver Resources |
***** |
97.1% |
21.5% |
Bear in mind that this isn't a list of recommendations. Instead, I offer these stocks as candidates for further research.
We have some cheap growers to work with. Consider Motley Fool Inside Value recommendation Nasdaq OMX, home to the Nasdaq Stock Market and owner of a super-low 0.71 PEG ratio based on projected 2009 earnings.
Basking in the Suntech
But my top pick today is Rule Breakers recommendation Suntech Power. I don't say that easily. When Fool co-founder David Gardner picked the stock in 2006 he pointed to excellent gross margins when compared to peers such as Evergreen Solar
Margins have since contracted because of rapidly rising prices for silicon, and the gap that once existed is no more. But a turnaround may be in order: Suntech just inked an eight-year silicon supply deal that should protect against market fluctuations.
Fools appear to agree. They recently gave the stock a big upgrade from four to five stars. CAPS investor B1gP1mp12369 shed further light on the company's improvements last week. Quoting:
Suntech was granted the National Export Inspection Exemption by the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) of the People's Republic of China. ... This means that Suntech will have more freedom to pursue international sales instead of sales just at home in China. Since China has 20% of the world's population, I think Suntech still has a huge amount of growth potential there as well. As oil becomes less and less available, solar energy will emerge, along with wind energy, as one of the leading alternative fuels. People will want cheaper bills, and Suntech is poised to be a dominant player in the solar market for years to come.
I agree, but I'm even more interested in what you think. Would you buy Suntech 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!
