Among Cuggino's holdings are FedEx, Disney and Freeport McMoRan. FedEx, he says, is aggressively growing both in the U.S. and abroad but at the same time has been pushing through price increases and maintaining its cost structure. Disney, which he says is something he might normally call a value stock for its participation in the fickle entertainment field, has been growing at a fast clip in the past year, rising from around $29 a share in the beginning of 2010 to $43 or so in February 2011. Cuggino says that despite cyclical businesses like movies and theme parks, the company seems to be hitting on all cylinders and not missing any opportunities with its Hannah Montana and High School Musical franchises.

Freeport, meanwhile, is perhaps another contrary move, he says. While most people might not see commodity stocks as growth, the amount of copper being yanked out of the ground hand over fist for auto production and infrastructure-along with the highly liquid monetary environment-means amped up returns. "Supply-demand plus devaluation of the currencies-to me that's a growth story," he says.

Yet Cuggino notably does not own Google or Apple-two companies so ubiquitous in growth portfolios that they often seem like silent partners. He concedes that he missed an opportunity by not buying Apple earlier in the decade when the consumer product potential of the company wasn't as apparent to him. But he eschews it now for another reason: It's just not cheap enough.

"One of the reasons we've not invested in [Apple or Google] is because they just weren't good values, although we recognize they're great companies. They're growing because everybody wants to own them, and so that drives up the price and we tend to consider the price that we're paying for the stocks we own."

Albert J. Meyer, the portfolio manager of the Mirzam Capital Appreciation Fund (MIRZX), another five-star Morningstar portfolio, also looks for growth stocks that he can buy at the lowest possible price. He likes champions, he says-like Teva Pharmaceuticals, "which is the largest generic pharmaceutical company in the world by a long measure."

He also likes Gerdau S.A., a global steel producer with mini mills in the Americas and Europe that is well known for recycling scrap metal in countries like Brazil, keeping control of operating leverage through vertical integration, and acquiring other concerns.

"You say, well, where is their growth going to come from?" asks Meyer. "Steel companies don't do well in recessions because of the high fixed costs. But then, when growth starts coming back, they gain tremendously from that operating leverage."

Meyer also owns Paychex Inc., a company that offers payroll services to small companies, which he believes is set to grow as the economy rebounds and more small business owners outsource. Southern Copper Corp., meanwhile, is his play on the world demand for copper and other products. He calls Canadian National Railway Company the best rail operator in North America, the one that generates the highest margins, has the best access to the seaboards and is best poised to benefit from higher fuel costs for transports, which will favor rail.

But Meyer is almost as famous for what stocks he won't invest in-companies with high stock option overhangs, ones that use their free cash flow to mop up dilution, a big problem in the tech industry, he says. "People don't realize that if you have great growth but then you dilute that growth through stock options, the share count increases and the way they fight the share count is to buy back the stock."
Apple is one he avoids, he claims, "because of its high stock option awards and big insider sales, which goes hand in hand with options. It's tough to buy when insiders are selling, even if you think it's good reasons, because they are monetizing their compensation packages. You say, 'Well, I'm not really investing, I'm buying the CFO's stock and helping him optimize his option program,' which goes against the grain."

For similar reasons he says he has avoided companies like Proctor & Gamble and Cisco. He claims his strategy, derived from the Black-Scholes method he used as a one-time accounting professor, helped him avoid AIG and Merrill Lynch before their famous blow-ups.