5 Stocks Geared for Growth

A stock's price follows its earnings, which in turn follow its sales. A company needs only to take care of its business for investors to profit in the long run.

With that in mind, examining companies whose revenue and profits are rising -- and which inspire analysts' confidence in continued future growth -- should give us a fertile field in which to discover solid candidates for long-term outperformance.

The roaring 20s
Below are a handful of companies that have enjoyed 20% or more annual growth in sales and earnings over the past three years, and for which analysts forecast total growth of 20% or more over the next two years. We'll then pair up those predictions with the community stock research at Motley Fool CAPS, to get an idea of which companies the 140,000-plus members think have the best chances of beating the market over the long haul.

Source: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

Just because an analyst predicts that a company will feature fantastic growth opportunities doesn't mean those predictions will become reality. But their preferred picks do offer an excellent starting place for your own research into extreme buying opportunities. So let's see why the operations of one of these companies may or may not be held in high esteem by investors, considering they appear to be sales and profits machines.

Tippling at the speakeasy
Generally, airline passengers are pretty secluded once they hit the air -- no phone or Internet. But in-flight connectivity will be the beneficiary of investments being made by the airlines, which thus far have been gun-shy following the failure of the Boeing (NYSE:BA) Connexion Wi-Fi service three years ago. EMS Technologies looks to profit from these new investments.

EMS Technologies supplies Aircell, an air-to-ground (ATG) telecom provider whose Gogo Inflight Internet service is equipped on 66% of all flights between JFK airport in New York and Los Angeles International/San Francisco International. That's expected to grow to as much as 92% by year's end. United Airlines, US Airways (NYSE:LCC), and Northwest have agreed to equip their aircraft with the service, joining AirTran and Virgin America as airlines with fleetwide service.

Get a doctor, stat!
EMS Technologies provides the network and application servers and wireless access points for the Gogo service. The growth potential leads CAPS member jfreedom to consider EMS a potential sleeping giant:

So do any of you guys fly on commercial airplanes? Did you notice that they are all talking about cell phones on flight coming this year? Is this company a sleeping giant? I'd expect their sales to start flying now.

The opportunity lies in airlines being able to charge a fee for the service on top of the ticket price. "Unbundling" services, or charging a la carte for extra amenities, was identified as a key revenue growth driver by nearly two-thirds of airline executives surveyed by IdeaWorks. Considering the industry's difficult financial straits, airlines may very well line up for any potential revenue-producing service.

At a market cap of just $304 million, EMS Technologies trades hands at just 12 times projected 2010 earnings, but put that side by side with 20% annualized five-year growth expectations, and EMS is looking pretty cheap.

Part of the risk here for the airlines (and investors) is that ATG systems could be squeezed by satellite-based systems, which use Wi-Fi within the plane and appear to function better over water and across borders. Instead of ATG technology, some carriers are looking at Ku-band satellite systems offered by Aircell rival Row44, as well as GSM/GPRS services operated by AeroMobile and OnAir. While AeroMobile and OnAir have signed up many foreign airlines to use their systems, Southwest Airlines is testing Row44's Wi-Fi system on a handful of planes now. Aircell may get grounded from future growth if too many carriers go with Wi-Fi.

No Great Depression
It pays to start your own research on these stocks on Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made -- all from a stock's CAPS page. Why not head over to the completely free CAPS service and let us hear what you've got to say about these or any other stocks that you think we should put on our dance card?