Growth stocks are the beauties of the stock world, plain
and simple. They're exciting, they have good stories, and
they can make you a lot of money.
But for all their beauty, growth stocks are also the
prima donnasof the market. They can be erratic, they
don't always live up to their billing, and they tend to
attract a shareholder base that's ready and willing to run at
the first signs of slowdown. For those reasons, caution is
certainly in order when you enter the world of growth
investing.
Fortunately,
The
Motley Fool's CAPS servicebrings us the collective
intelligence of a community of more than 140,000 investors
and is a great resource for separating
the Jessica Albasfrom the
Jabba the Hutts. Each of the stocks competing for this
week's top spot has a market cap of at least $100 million and
grew its net profit per share by an average of 15% or more
per year over the past three years. (You can
run the screenfor yourself.) So let's go ahead and meet
our contestants.
True Religion
Fashionista
True Religion Apparel (Nasdaq: TRLG) may be
no
Guess? -- yet. But the company certainly has
its eye on the prize. While the company is best known for its
popular hip-hugging jeans brand, it has been rabidly rolling
out new products in other areas and putting up its shingle on
bricks-and-mortar stores all over the country.
Recession is no friendto a company that sells high-priced
clothing, but True Religion stormed into the downturn with an
almost unstoppable momentum. Between 2005 and the 12 months
ended in June, the company's revenue increased nearly 180%
and its earnings per share jumped 136%.
Teva Pharmaceutical
Health care is a hot-button issue, but there are some
companies that we should be able to count on smiling through
any
new regulations. One of them may very well be
Teva Pharmaceutical (Nasdaq: TEVA), the
powerhouse in the generic-drug industry both in the U.S. and
the rest of the world.
At the end of last year, the company acquired Barr
Pharmaceuticals, further increasing its already substantial
muscle. Over the past three years, the company has boosted
its operating income by an impressive 69%, and analysts are
expecting to see a 22% year-over-year improvement in earnings
per share when Teva reports its September-ended quarter.
Walter Energy
Thanks to spinoffs and business wind-downs over the
past few years,
Walter Energy (NYSE: WLT) is no longer a
mishmash of random businesses. It's (almost) all about the
coal, baby! Walter specializes in metallurgical coal, a
high-quality coal that commands a premium price to steam and
industrial coal and has been in high demand from
growth-hungry China.
While the company is a slave to the price of and demand
for the coal that it sells, it has the ability to control its
cost of production and increase its output capacity. The
company should also continue to benefit from increased focus
now that it's dumped its struggling homebuilding and
financing operations.
priceline.com
Though online travel booking may not be all that new at
this point,
priceline.com (Nasdaq: PCLN) is finding ways
to rack up serious growth. The company offers online booking
of everything from airline tickets to full vacation packages
in the U.S. and works with more than 70,000 hotels around the
world to offer hotel reservations.
The company is firmly focused on maintaining its position
within the U.S. market, while at the same time grabbing a
larger share of the global hotel market. The strategy seems
to be paying off for shareholders. Earnings per share are
expected to finish the year 25% above their 2008 mark.
Amazon.com
Whether you're a bricks-and-mortar giant like
Best Buy (NYSE: BBY) or
Target (NYSE: TGT), or an online retailer
like
Amazon.com (Nasdaq: AMZN), you can't help but
clench your teeth when consumers start squirreling away their
money. But don't expect to see Amazon shaking in its boots
anytime soon; the company continues to broaden its product
offerings and steal market share from those bricks-and-mortar
slowpokes.
Between 2005 and the 12 months ending in June, the company
darn-near doubled its earnings per share. Continued... |