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 to get full, updated results.)
So let's go ahead and meet our contestants.
Procter & Gamble
Procter & Gamble (NYSE: PG) may not be
one of the first names that leaps from your lips when talking
about growth companies. But don't be fooled by P&G's $167
billion
market
cap; it has produced, and continues to target,
significant growth.
Over the past 10 years, P&G's net income has more than
tripled, to $13.4 billion as of its most recent fiscal year.
This surge has been fueled by growth from major customers
like
Wal-Mart , as well as an intense focus on
capturing new business from emerging markets.
It's that latter area that the company hopes will be a
growth driver in years ahead. Specifically, the company is
hoping to add as many as 500 million new customers in India
over the next five years and increase per-capita spending on
P&G products significantly in both India and China.
Buffalo Wild Wings
Buffalo Wild Wings (Nasdaq: BWLD) is a
dazzling example of being very clear about what investors
should expect. The company's management team isn't shy about
letting investors know that they're looking for 20% earnings
growth by increasing the number of restaurants by 13% to 15%
in 2010.
B-Wild's management team has been pretty good at
delivering on its promises. Between 2005 and 2008 the company
doubled sales and more than doubled earnings per share,
putting annualized growth at 26% and 39%, respectively.
Can they keep delivering? The restaurant industry is more
competitive than investment bankers at a speed-dating event,
and B-Wild's
third-quarter reportseemed to disappoint some investors.
However, looking at the bigger picture, the company appears
to have found a way to tap the sports bar segment and pump
out some pretty tasty growth.
Goldcorp
We live in a world fixated on an uncertain economic
picture and major inflation concerns. While this is worrisome
for companies ranging from
Citigroup (NYSE: C) to
Microsoft (Nasdaq: MSFT), it's stuck a
red-hot poker on gold's flank. Though gold prices have
been volatile over the past couple of years, the surge that
started in late 2008 now has gold selling at more than $1,000
per ounce.
For
Goldcorp (NYSE: GG), one of the largest
producers of gold in the world, this is major cause for
celebration. But the rising price of gold isn't the only
reason to expect growth out of Goldcorp. The company's Red
Lake mine -- one of the world's premier gold mines -- is
expected to keep delivering in high fashion. Meanwhile, the
company has high hopes for its Penasquito mine in Mexico, one
of the largest new mines in the world, which is estimated to
have 17.4 million ounces of gold.
Apple
If
Apple (Nasdaq: AAPL) isn't one of the best
turnaround stories out there, then I don't know what is. Not
all that long ago the company was a has-been in the
personal-computer market, rapidly losing out to a cadre of
fast-growing competitors like
Dell and sporting dismal financials to
match.
Today, the company is one of the "it" tech companies
thanks to a revamp of its computer segment and the release of
the svelte iPod and iPhone. You don't need to look much
further than the results from the company's September-ended
quarter. In addition to a big contribution from iPhone sales,
MacBook numbers (as fellow Fool Tim Beyers
pointed out) looked spectacular.
With 25% revenue growth and 46% net income growth during
the quarter, the appropriate question may be "Can anyone stop
Apple?"
Vale
If global growth is on your mind, then
Vale (NYSE: VALE) better be on your radar. As
the world's second-largest miner and largest producer of iron
ore, Vale is well-positioned to be a major beneficiary of
construction all over the world.
Recent economic turmoil has meant that Vale has put a lot
of its focus on cutting costs, but any investor worth his
weight in ticker tape knows that the real picture is the big
picture. And the big picture looks good for Vale. Of course
there's the well-known
growth king in China, but there are plenty of other
economies that will likely be sucking up resources in the
coming years; Vale's
home base of Brazilnot least among them. Continued... |