Baidu.com, Inc. (ADR) (BIDU) & More: 3 Growth Stocks That Value Investors Should Love

Not only that, but consider that Dollar Tree is managed extremely effectively. The company earned returns on assets and equity of 24.4% and 41.1%, respectively, during 2012. In addition, the company is in sound financial position, with a long-term debt to equity ratio of just 15%.

Not to be outdone, earlier this year, consumer fashion company Fossil Inc (NASDAQ:FOSL) reported record fourth-quarter and fiscal 2012 results. During the quarter, net sales and earnings per share increased 14% and 34%, respectively. Earnings per share for the full year hit a record $5.59, rising 21% from the year before. Even better, the good times are expected to continue for Fossil. Management expects first-quarter and full-year 2013 sales growth of 10%, and full-year diluted earnings per share are expected to be in a range of $5.85 to $6.15.

Fossil has a great balance sheet, with a long term debt-to-equity ratio of just 6% and more than twice as much cash and equivalents as long-term debt. In addition, the company’s return on equity was 27% last year, indicative of how efficiently the company is managed. And yet, Fossil can’t earn more than a trailing P/E of 17 times, which matches the valuation on the S&P 500, despite the fact that Fossil’s growth trajectory is likely to be far better than the market’s.

Growth or value, it all sounds like opportunity to me

There’s a stark contrast between the two investing philosophies, and rarely any overlapping companies with qualities that appeal to both groups. Add in the fact that in today’s market, in which the Dow Jones Industrial Average recently broke new highs, and you’d likely be hard-pressed to find growth stocks with reasonable valuations.

However, each of these stocks has been felled by what appears to be little more than the market’s irrationality. These stocks are growing their revenues and profits at rates that far exceed the growth of the broader market, yet each of them carries a trailing price-to-earnings ratio about on par with the S&P 500. Investors with a Foolish eye for opportunities likely see the potential for market-trouncing returns going forward for each of these stocks, and if you consider yourself to be such an investor, you’d do yourself well to consider adding these names to your portfolio.

The article 3 Growth Stocks That Value Investors Should Love originally appeared on Fool.com is written by Robert Ciura.

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