7 Growth Stocks on Sale

What's your investment style? Sooner or later, all investors are faced with the challenge of having to answer this pretty loaded question. Are you a Rule Maker or a Rule Breaker? A grow-getter or a value-seeker? A foolish speculator or a Foolish investor?

Although it's always good to clarify our general tolerance for risk-taking, we should never forget two important things:

1. Growth and value investing are joined at the hip, and
2. The most awesome growth stocks are also undervalued stocks.

The best of both worlds
Successful investing isn't simply about buying the stocks with the lowest P/E ratios, or the ones with the most spectacular growth rates. After all, treacherous value traps and growth traps lurk around every corner of the market. Instead, the key to investing is putting your money on the most attractive risk/reward propositions Mr. Market has to offer.

Buying growing companies at discounted prices is probably the best method by which to do that. This approach earns you a double benefit: buying a stock that trades below its fair value today, and owning a business that's well positioned to grow that value tomorrow.

We've got these stocks PEG-ged
So, with our hearts set on growth -- but our brains stubbornly fixated on getting a fair price for it -- here are seven more reasonably priced, fast-growing favorites of our Motley Fool CAPS community.

In addition to having five-year estimated growth rates above 20% and PEG ratios below one, these stocks have received a four- or five-star rating (out of five) from our pool of nearly 28,000 individual and professional investors.

As always, don't take these stocks as well-formulated investment recommendations, but rather as candidates for further research. Regardless of which investment approach you take, due diligence is the thread that binds all superior returns.   

To get you started, though, here's a brief summary of one stock that caught my attention.  

Gol! Gol! Gol!
If you've read the Fool for any length of time, you know we've got plenty of reasons for not investing in airline stocks. The cutthroat, cost-crazy, commodity-like nature of the airline industry makes it one of the most painful businesses to be in. But like most things in life, there are usually exceptions to the rule. Gol Intelligent Airlines, a low-cost, low-fare airline in South America, looks like one of those exceptions -- at least, that's what our CAPS community thinks.

By scanning some of the Gol comments on CAPS, you'll notice how often it's compared to Southwest Airlines --- one of the few consistently profitable carriers in the industry. Like Southwest, Gol gains cost advantages by operating a single class of service, using a simplified fleet of just one type of aircraft -- the Boeing 737NG.

The company has executed this model so well, in fact, that it now has higher operating margins than low-cost carriers like West Jet, Motley Fool Stock Advisor selection JetBlue, and even Southwest itself. Of course, it doesn't hurt that Gol is pretty much the only major low-cost airline in South America -- a continent that's just starting to take advantage of the benefits of flying.

Gol's low-cost dominance in South America still represents only about a 10% penetration rate. For perspective, low-cost penetration in North America stands at 25%, and it's fought over tooth and nail by the airlines mentioned above. Next to China, South America is expected to have the highest passenger growth of any region over the next several years. In addition, Gol's recent acquisition of Varig should help its market share battle with TAM Airlines, South America's largest high-cost legacy carrier.

Now, as our Foolish airline guru Tim Beyers mentions, even low-cost carriers aren't immune to the day-to-day, money-losing headaches that all airlines face. Just last week, for example, Gol reported a huge drop in Q1 earnings because of problems caused by Brazil's ongoing battles with its air traffic controllers. In other words, there are still major risks that Fools need to consider.

Still, with an intriguing "copycat" model, huge growth potential in Latin America, and a reasonable price to boot, Gol Intelligent Airlines is worth at least a simulation run in CAPS. Here three CAPS players who've already climbed aboard:

• CodeCracker believes GOL's fundamentals will eventually outweigh the air-traffic problems and says, "GOL is called the Southwest Airlines of Brazil. It's the low-cost airline that's been growing sales by more than 30% per year. A concern that Brazil needs more air-traffic controllers has slowed sales, temporarily; the government is now staffing up, so that situation should improve."
• Naicinvestorz, meanwhile, flies with a top-down approach: "... [L]ong term trend in Brazil is more people flying vs taking the bus. Good management and good communication with shareholders. It's a growth stock, reasonable valuation, and you get a dividend."
• Finally, CAPS All-Star abetens1 touches down with some intelligent common sense: "Good prices and good service. Remember, Brazil is comparable to the United States in land mass. It is a long way to travel from major cities like Fortalesa, Sao Paolo, Rio de Janeiro, Brasilia, Goiania, etc. There is a huge market to fill in domestic Brazilian air travel."

Get growin', Fool
So, does the idea of buying high-growth companies at decent prices make complete sense to you? More appropriately, how could it not? Join our Motley Fool CAPS community to get more analysis on the above ideas, create your own list of fairly priced growers, or even weigh in with a sharp opinion of your own.

Within moments, you'll have access to stock ideas that can provide the best of both the value and the growth investing worlds. Oh, and it's absolutely free. Now that's what I call a reasonable price.  

JetBlue is just one of a host of Motley Fool Stock Advisor picks. Find out why, and see which other stocks have made the cut, with a 30-day free trial of our flagship newsletter.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Fool has a disclosure policy.