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Growth is good because it increases earnings meaningfully and lets the current P/E ratio go down. This is the reason investors pay 20, 50 or even 100 times of earnings for an investment. But you really make money if you buy a stock that beats analyst expectations and generates additional growth fantasies. Let’s take a look into the internet information providing industry. The average price to earnings ratio amounts to 28.8.

I analyzed the industry by growth stocks. My first condition is that the 5-year sales and earnings per share growth should be above 10 percent. Further, the company should have additional growth potential, measured by a positive expected 5-year EPS growth. Finally, the growth should create value. This fact is covered by the ratio return on investment (ROI). The ratio shows how efficiently a company converts its debt and equity into profits. I decided to screen only stocks with a positive ROI. Here the results sorted by fastest sales growth:

1. Baidu (NASDAQ:BIDU) has a market capitalization of $47.3 billion, generates revenues in an amount of $1.7 billion and a net income of $769.5 million. Its following P/E ratio is 61.6 and forward price to earnings 31.3, Price/Sales 28.6 and Price/Book ratio 27.0. Dividend Yield: 0 percent. The company grew 90.1 percent in sales and 132.5 percent in EPS over the past five years. For the upcoming five years, the EPS growth is expected to grow 49.1 percent. The ROI is 56.3 percent.

2. SouFun Holdings (NYSE:SFUN) has a market capitalization of $227.1 million, generates revenues in an amount of $277.7 million and a net income of $86.5 million. Its following P/E ratio is 11.6 and forward price to earnings 6.9, Price/Sales 0.8 and Price/Book ratio 11.8. Dividend Yield: 0 percent. The company grew 65.6 percent in sales and 83.0 percent in EPS over the past five years. For the upcoming five years, the EPS growth is expected to grow 36.7 percent. The ROI is 53.1 percent.

3. Sohu.com (NASDAQ:SOHU) has a market capitalization of $2.2 billion, generates revenues in an amount of $710.3 million and a net income of $174.1 million. Its following P/E ratio is 14.0 and forward price to earnings 10.2, Price/Sales 3.2 and Price/Book ratio 2.3. Dividend Yield: 0 percent. The company grew 42.4 percent in sales and 35.2 percent in EPS over the past five years. For the upcoming five years, the EPS growth is expected to grow 17.5 percent. The ROI is 27.4 percent.

4. Google (NASDAQ:GOOG) has a market capitalization of $188.1 billion, generates revenues in an amount of $35.8 billion and a net income of $9.6 billion. Its following P/E ratio is 19.9 and forward price to earnings 14.0, Price/Sales 5.3 and Price/Book ratio 3.4. Dividend Yield: 0 percent. The company grew 36.7 percent in sales and 39.3 percent in EPS over the past five years. For the upcoming five years, the EPS growth is expected to grow 19.1 percent. The ROI is 18.2 percent.

5. Healthstream (NASDAQ:HSTM) has a market capitalization of $291.8 million, generates revenues in an amount of $73.8 million and a net income of $5.4 million. Its following P/E ratio is 57.4 and forward price to earnings 41.2, Price/Sales 4.0 and Price/Book ratio 4.8. Dividend Yield: 0 percent. The company grew 19.2 percent in sales and 16.2 percent in EPS over the past five years. For the upcoming five years, the EPS growth is expected to grow 23.0 percent. The ROI is 9.2 percent.

6. Ancestry.com (NASDAQ:ACOM) has a market capitalization of $1.0 billion, generates revenues in an amount of $354.4 million and a net income of $49.9 million. Its following P/E ratio is 22.6 and forward price to earnings 14.7, Price/Sales 2.9 and Price/Book ratio 3.0. Dividend Yield: 0 percent. The company grew 16.5 percent in sales and 29.0 percent in EPS over the past five years. For the upcoming five years, the EPS growth is expected to grow 19.3 percent. The ROI is 12.8 percent.

7. Global Sources (NASDAQ:GSOL) has a market capitalization of $233.2 million, generates revenues in an amount of $206.6 million and a net income of $27.0 million. Its following P/E ratio is 8.1 and forward price to earnings 7.4, Price/Sales 1.1 and Price/Book ratio 2.1. Dividend Yield: 0 percent. The company grew 11.9 percent in sales and 17.8 percent in EPS over the past five years. For the upcoming five years, the EPS growth is expected to grow 38.0 percent. The ROI is 18.2 percent.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 7 Fastest-Growing And Value-Creating Internet Information Providers