5 (of Many) Growth Companies to Buy
Even in this slow-moving economy, there is growth out there. You just have to find it, says a slew of top growth fund managers.
The
iShares S&P 500 Growth Index ETF
(IVW) - Get iShares S&P 500 Growth ETF Report
has returned barely a half-percent year-to-date compared with the
iShares S&P 500 Value Index ETF
(IVE) - Get iShares S&P 500 Value ETF Report
, which is up 2.3% since January. The fact that value is trumping growth should be no surprise, considering America's GDP has declined as the year has progressed, from 3.7% in the first quarter to 1.6% in the second, and expectations for the rest of the year are not high.
Still, growth fund managers say their investors should not abandon hope and throw in their lots with the value crowd. There are companies growing their top lines and trading at deservedly rich multiples -- meaning they're worth buying. Here are a few of the managers' favorites:
(GOOG) - Get Alphabet Inc. Class C Report
"The advance of connected devices throughout the world is the most significant secular growth trend in the world right now, and Google is the best-positioned company to participate in the ride."
-- Keith Goddard, co-manager of the Capital Advisors Growth Fund
(CIAOX) - Get Capital Advisors Growth Report
WYNN RESORTS
(WYNN) - Get Wynn Resorts, Limited Report
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-- "Wynn continues to look very attractive over the long-term, given the likelihood of a continued recovery in the United States and its exposure to China through its significant presence in Macau."
-- Michael Cuggino, portfolio manager of the Permanent Portfolio Aggressive Growth fund
(PAGRX) - Get Permanent Portfolio Aggress Grw I Report
.
COGNIZANT TECHNOLOGY SOLUTIONS
(CTSH) - Get Cognizant Technology Solutions Corporation Class A Report
"In tough times, companies can stretch their dollars by outsourcing information technology projects that enhance cost containment while improving business processes with minimal investment, and we believe Cognizant is one of the best at doing this in this fast-growing industry."
-- Kevin Walkush, Business Analyst for the Jensen Fund
(JENSX) - Get Jensen Quality Growth J Report
.
CEPHALON
(CEPH)
"It's an exciting biotech stock trading at less than nine times estimated earnings for this year, and it's growing earnings this year over 20%, yet the stock is down year to date slightly."
-- Bob Auer, portfolio manager of the Auer Growth Fund
(AUERX) - Get Auer Growth Fund Report
TRANSOCEAN
(RIG) - Get Transocean Ltd. Report
"A year from now people will not be talking about the Gulf Oil spill, and Transocean should be back to where it was before the spill -- around $95 for a 35% to 40% return."
-- Craig Hodges, co-manager of the Hodges Fund
(HDPMX) - Get Hodges Retail Report
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