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10 Growth Stocks at Value Prices

We examined the 500-plus holdings in the Morningstar US Growth Index and found some stocks with good growth prospects selling at reasonable valuations.

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Growth companies are generally thought of as high-quality firms with an above-average chance of growing their earnings faster than industry peers or the market as a whole. That growth can come at a price, though, with these stocks often trading at high price/earnings and book/value ratios.

But paying a high price for growth isn't always a great idea. If there is no margin of safety (in other words, a discount to the stock's fair value estimate) built in to the share price, everything has to go smoothly in the company’s growth path in order to justify the premium valuations. 

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Karen Wallace does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.