From the July 2008 issue of Boomer Market Advisor • Subscribe!

Five fast growing companies to watch

"If only I had invested in Microsoft," "If only I realized Apple was more than a fruit," if only, if only ...

Morningstar lists five undiscovered companies to ensure you're not slapping your forehead 10 years from now. The Chicago-based research firm screened each of them using the following criteria:

  • Increasing operating income by at least 15 percent per year for the last three years.
  • A four- or five-star rating by Morningstar
  • Less than 6 percent of shares owned by mutual funds.

The five companies (along with Morningstar analyst comments) are:

1. Central North Airport Group (OMAB) - Grupo Aeroportuario del Centro Norte (OMA) continues to reap the rewards from increasing Mexican air traffic with its geographic stranglehold on airports throughout central Mexico ... Recently, new low-cost Mexican airlines have helped to drive robust passenger growth through OMA's airports, and we expect this trend to continue.

2. Telecommunications Indonesia (TLK) - Although competition is growing in Indonesia's telecom industry, we believe that Telekomunikasi Indonesia's (Telkom) advantages will allow the firm to maintain its dominance ... Wireless penetration rates remain low, at about 35 percent, presenting tremendous growth opportunities.

3. China Medical Technologies, Inc. (CMED) - Riding the wave of a government commitment to heal the ailing Chinese health care industry, China Medical Technologies has leading technology and cost advantages that give it an edge over its competitors.

4. Satyam Computer Services (SAY) - As the fourth-largest India-based information-technology firm, Satyam is often misunderstood. Most of its revenue comes from on-site or near-shore delivery, so its operating margins are low compared with its Indian peers (about 20 percent), but its returns on invested capital are still stellar at about 50 percent.

5. Home Inns & Hotels Management, Inc. (HMIN) - Since opening its first budget-minded hotel in 2002, Home Inns has expanded to 200 properties sprinkled throughout China ... Not surprisingly, Home Inns is not the only game in town ... Nevertheless, the market is clearly big enough to support several major players, and we believe Home Inns will be one of them.

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