People need to make the distinction between small cap stock and growth stock.
The best way to search for growth stocks with out getting caught up in the 'blue sky' stocks is to look for companies which have a continuous high return on capital. When buying companies you want something that is able to replicate its current earnings in its business by reinvesting capital at a high rate - this is where return on capital comes in.
The best in the ASX are the WOW, CCL, WPL, CBA and BHPs of the world.
Its not sexy but all of these companies are able to reinvest their shareholders capitals at high rates. Significantly more than most of the small/mid-caps going around.
