5 Stocks Ready for Liftoff

Are you really a growth investor?

It's a question worth asking. Fast-moving tech stocks have taken a beating recently, leading to a slew of bargains for those with the guts to buy. Just ask investors who hold shares of SuccessFactors (NASDAQ:SFSF), which yesterday fell more than 6% on no news whatsoever. Sheesh.

No matter. All-star investors bet on growth over the very long term. They know that:

• Businesses that make investors billions always begin as growth stocks.
• The best of them feature massive and identifiable competitive advantages.
• 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 seeks the next great multibagger. But unlike the Rule Breakers team, which scours everything from financial statements to trade magazines to clinical reports in its research, we're going to rely on our Motley Fool CAPS investor-intelligence database.

Specifically, we're looking for stocks that have earned a four- or five-star rating in CAPS, and which are expected to grow their earnings by at least 20% annually over the next five years. Our CAPS community collectively believes that stocks scoring four or five stars will outperform the S&P 500.

Let's have the list
Now, with that preamble behind us, here are five more top growth stocks:

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.

We've got some interesting companies to work with, more than half of which are Chinese. Real estate agent E-House is on "Wall Street's Buy List," and travel agent Ctrip.com looks like a bargain stock. Here in the U.S., drug researcher Kendle recently raised guidance, while construction firm Hill International committed to a $20 million stock buyback.

Well, look at you, Sohu
My favorite, however, is Rule Breakers recommendation Sohu.com. I'm not alone; Foolish colleague Rick Munarriz says it's the one China stock he'd buy for 2009.

"It is on the multiplayer gaming front where Sohu has been a rocket lately, helping revenue and earnings soar 134% and 316%, respectively, in its latest quarter," Rick wrote recently. "Unlike other dot-com bellwethers like Baidu and SINA (NASDAQ:SINA), analysts have actually been raising Sohu's profit targets over the past three months."

Simplicity may have something to do with that. "My Chinese (Taiwanese) co-worker just explained to me that Sohu.com has everything that every Chinese person wants within two or three clicks of its front page," wrote CAPS investor FleaBagger in April. "This is idiomatic of the Chinese language, in which each word is the size of one letter of an English word. So, for example, if Sohu did CAPS, this page would be all on one screen."

Helpful and profitable, that's the sort of rebel I enjoy investing in. But I'm more interested to know what you think. Would you buy Sohu.com at current 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!

On Jan. 12, 2009, Fool co-founder David Gardner, Jeff Fischer, and their Motley Fool Pro team will accept new subscribers to their real-money portfolio service. Motley Fool Pro is investing $1 million of the Fool’s own money in long and short positions in a range of securities, including common stocks, put and call options, and exchange-traded funds (ETFs). They also incorporate proprietary CAPS "community intelligence" data into their research. To learn more about Motley Fool Pro and to receive a private invitation to join, simply enter your email address in the box below.