Growth stocks can ignite your portfolio, sending its value rocketing up, up, and away at an extraordinary pace. But we all know the dangers involved in this kind of investing -- play with fire, and you might get burned.
Ideally, we want to find stocks with exceptional growth potential and a little less risk. Finding companies that are already profitable and earning a solid return on equity can help. So can companies that are highly regarded by the Motley Fool CAPS investing community. Stocks earning a five-star rating from the community have beaten the market by 12%, annualized, over the first 18 months of tracking.
With that in mind, I used our CAPS screener to pick out some fast growers that are a bit less speculative. I searched for companies that have increased revenue by more than 35% over the past three years, but also had positive earnings per share and a return on equity greater than 15% over the last 12 months.
They also have:
- A five-star CAPS rating.
- A market cap greater than $100 million.
|
Company |
Price |
3-Year Average Revenue Growth Rate |
Return on Equity |
|---|---|---|---|
|
Arcelor Mittal |
$79.47 |
83.0% |
17.9% |
|
China Medical Technologies |
$53.02 |
63.4% |
21.5% |
|
Dawson Geophysical |
$61.42 |
40.3% |
19.5% |
|
Infinera |
$11.44 |
493% |
16.1% |
|
Satyam Computer Services |
$23.20 |
38.5% |
23.9% |
|
Transocean |
$127.16 |
41.6% |
28.9% |
|
Vimpel Communications |
$24.06 |
49.7% |
27.0% |
Data provided by Motley Fool CAPS as of Aug. 8, 2008.
As always, a screen is only the first step in finding a winning investment. These companies have seen outstanding revenue growth over the past few years, but there's no guarantee they will continue those recent trends. Still, this list may be a good place to start.
Looking for more ideas? Eager to discuss these? Join our 115,000-plus-member Motley Fool CAPS investing community.
