Hypergrowth stocks aren't every investor's cup of tea. Many investors aren't comfortable holding companies with stellar revenue growth but minimal or negative earnings.

Buying into such companies is an inherently risky strategy, with valuations based on pure growth prospects rather than proven bottom-line strength. Some are mirages, built on hype and unproven ideas. Wall Street is strewn with the remains of failed former market darlings that ran out of hypergrowth fuel and cash reserves before they had a solid long-term business going.

But if you're willing to stomach the volatility, the potential rewards of finding the next tech giant can be enormous. In the long run, compound returns from one or two big winners can make up for many swing-and-miss mistakes along the way. So if you can handle the heat, there's money to be made in the hypergrowth kitchen.

Continue reading

Source Fool.com