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7 Great Growth Stocks with Long-Term Potential

Buying shares of a growth company early in its run to greatness is the holy grail of stock picking. The goal is to get in at a relatively cheap price, hang on as revenue and earnings rise sharply, and reap big returns as other investors hop aboard. But after the stock market’s phenomenal five-year bull run, finding undiscovered gems today is no easy feat.

We went hunting for attractive growth companies and came up with seven. (Bonus: We’ll also tell you about four good mutual funds, in case you'd rather buy your growth stocks that way.) Our stock picks cover a broad spectrum of sizes, industries and growth rates, but they all share one trait: In the view of Wall Street analysts, their earnings will rise significantly faster than the 10.2% average annual earnings growth predicted for Standard & Poor’s 500-stock index over the next three years. (The actual growth rate for the broad market will almost certainly be lower than what Wall Street expects.)

Having a long time horizon is key at this stage of a bull market. Buying at today’s price levels may mean it will be five years or more before a stock realizes meaningful appreciation.

Prices and related figures are as of the July 21 close. Earnings estimates provided by Thomson Reuters.

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