Thanks to the Internet and sites such as Yahoo! Finance and MSN Money, investors have more tools than ever to search for stock ideas. But screening stock databases often returns numerous stocks that need to be weeded out because the numbers don't tell the whole story. Maybe the massive growth at one company resulted from one-time tax adjustments, not core operations. Or maybe the screen didn't include the latest announcement that a dividend was canceled.

So just like the color-by-numbers books kids doodle on, the picture for stocks pulled from any screen isn't clear until the appropriate colors are added to the page. In this edition of "Color to the Numbers," we'll enlist Motley Fool CAPS to take a Foolish look at a screen for large-cap growth stocks to see which stocks may be worth investigating further, and which should be cast aside.

Better a screen than a window
The community of knowledgeable investors who rate stocks in CAPS will help us in our search for large-cap growth stocks. By pulling up a quote on a particular stock in CAPS, investors can see at a glance how the collective community rates a company today. In addition, investors can see how the very best All-Star stock pickers -- CAPS players with a ranking above 80 -- rate a given stock. There are even pitch commentaries and blogs that offer the details behind bull and bear opinions. This information gives investors many more qualitative resources than just numbers and tables.

Let's look at today's growth screen, using the following criteria:

  • Market cap of at least $5 billion.
  • Price-to-earnings-to-growth (PEG) ratio of less than 1.0.
  • Free cash flow of at least $250 million.
  • Estimated annual earnings growth of at least 20% for the next five years.

This should give us the cream of the crop in terms of stocks that have already hit their stride, with strong projected performance but a still-palatable price. Of course, there may be very good reasons why these companies trade at low multiples. This is where CAPS can really help!

Opinions with the numbers
Here's a sampling from the list of stocks our screen pulled up today.


Estimated 5-Year Growth

CAPS Rank (Out of 5)

Diamond Offshore (NYSE:DO)



Chesapeake Energy (NYSE:CHK)



Harris (NYSE:HRS)



Cummins (NYSE:CMI)



Electronic Data Systems (NYSE:EDS)









Since our screen is sorting for large-cap companies, most investors have likely seen these names before. While each of them is trading at values less than their projected growth rate, CAPS investors have differing opinions on their chances to beat the market going forward, so lets dig a little deeper and add some color to these numbers.

Sporting the second-highest projected growth rate on our list, communication systems developer Harris earns high marks from the CAPS community. A major supplier to the government, aerospace, and defense sectors, Harris possesses solid fundamentals and has shown consistent growth, including revenue growth at a compound rate of 18% over the past two fiscal years. With the strong trend of military and defense spending in the U.S., investors see Harris well positioned to compete for government funds. Indeed, only one out of 189 CAPS players rating the company believes it will underperform the market, with the rest giving the company a thumbs-up.

Another stock projected to experience significant future growth is engine manufacturer Cummins. The Indiana-based company has a long history of providing the powerplants for trucks and various types of commercial, agricultural, and construction vehicles. Even though the stock has been on a tear lately -- up 90% year to date -- many CAPS investors still see shares of the engine maker as a good value. The company's ability to overcome some major recent challenges -- such as a big drop in heavy-duty truck engine business -- and continue growing has many investors revved up as well. The company's increased guidance in the most recent quarter, and its growth opportunities in several emerging, international markets, are only a few of many reasons for 112 out of 118 CAPS All-Stars to vote the way of the bull on this company.

Not every growth opportunity strikes a happy tone with CAPS investors, though. UAL is a prime example. Investors cite a long list of reasons to be wary of the legacy airline operator, including high fuel costs, heavy competition from low-cost carriers such as Southwest Airlines (NYSE:LUV), and a poor operational track record. While a forward price-to-earnings ratio of 11 has tempted many investors to consider the beaten-down company, 72 out of 162 still strike a bearish tone, voting for the company to underperform the market in the future.

Let 60,000 investors be the judge
It's may be difficult to discern just where opportunities lie with large-cap growth stocks, especially when you're just "running the numbers." Thankfully, the collective wisdom of a huge pool of investors can quickly add color to the outlines. But even with an entire community of qualified opinions acting as the judge, individual investors should still perform their own research.

Want to see your favorite screen results get run through the wringer in the CAPS community? It's free to tap the knowledge base and even give your own opinion. Check out Motley Fool CAPS for yourself!

Chesapeake Energy was selected by the Motley Fool Inside Value team for its great prospects at a bargain price. A free 30-day trial shows just what other companies are trading below intrinsic value and poised to beat the market.

Fool contributor Dave Mock does his best to color within the lines, but he reserves his right to artistic expression. He owns no shares of companies mentioned here. Dave is the author of The Qualcomm Equation. The Fool's disclosure policy doesn't see color or the wart on your nose.