7 Most Reliable Growth Stocks in the Market

It took until 2008 for Rackspace to surpass the $500 million annual sales threshold but just three more years to hit the $1 billion mark. Analysts project that 2014 sales will top $2 billion.

Investors have a chance to buy this high-growth stock at a more reasonable price, as a pullback $60 to $43 over the past three months has dragged down what had been fairly high price-to-sales and price-to-earnings multiples.

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Why the pullback? The slow economy gets some of the blame as sales are expected to grow 25% to 30% this year, down from prior projections of 35% growth. Rackspace is also shifting to a new platform for cloud customers called "OpenStack," which has led to a temporary sales hiccup while the technology migration takes place. Once that is complete, analysts at Goldman Sachs believe that Rackspace will continue to benefit from an ongoing shift from internally-housed corporate data to outsourced "cloud" based data.

Lennar, Meritage Homes and M.D.C. Holdings

Homebuilders Lennar (LEN), Meritage Homes (MTH) and MDC Holdings (MDC) are likely to benefit from the same trend: Sales of newly built homes have begun to rebound, setting the stage for a sustained run of growth. Each of these homes builders is guiding for sales growth in excess of 20% this year, while the analysts that follow the home builders see the trend really taking off as we move towards the middle of the decade.

The investment appeal of each of these home builders depends on your investment style. Meritage is poised to show the strongest EPS growth next year: nearly 200%. Lennar is best-positioned to capitalize on any blocks of land that come up for sale, as it has nearly $1 billion in cash. MDC Holdings sports the most attractive dividend yield: 3.1%.



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Cabot Oil & Gas

Cabot Oil & Gas (COG) has tapped into a gusher -- the Marcellus Shale, to be exact, where the company controls 190,000 highly-productive acres. (Cabot also has a decent position in a number of shale regions across the country.) As the company has dug more wells, output of gas, oil and other derivatives has been rising at a fast pace.

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