NEW YORK (MONEY) - The theory behind growth investing is simple. If a company can increase earnings faster than the average blue chip, its share price is likely to outpace the market averages over the long term.

Growth stocks can be volatile, however. So it's important to make sure of three things before you buy.

First, you need a time horizon long enough for growth stocks to show their superior performance. Since World War II, growth stocks have sometimes lagged conservative issues for as long as six or seven years. So you need to be prepared to hold for more than a decade to be fairly sure of coming out ahead.

Second, growth may not boost share prices if stocks are trading at very high price/earnings ratios when you buy them. Declining P/Es can neutralize higher earnings. So it's important to buy at fair valuations.

Third, you should check to see if analysts are raising their ratings on a stock. If analysts are cutting their ratings, it may be a sign that shares are cheap for a reason -- because growth prospects are deteriorating.

To find companies that look promising for growth investors, I screened the Sivy 70 for companies with earnings growth rates several percentage points above the market average.

In addition, I looked for stocks that have been upgraded by analysts since the start of the year. I also looked for P/Es, based on projected earnings for 2007, that are moderate compared with the stocks' growth rates.

Here's a quick rundown on seven attractive companies. Where applicable, I've added links to recent CNN Money stories on the stocks.

Aetna (Research) is one of the largest health insurers in the country. The company is particularly focused on its consumer-directed health-insurance products, such as health savings accounts (see "Aetna's secret to success").

Applied Materials (Research) is the leading supplier of semiconductor-manufacturing equipment. The company is facing a tough second half of the year, but the stock is cheap relative to the long-term potential of the business (see "Applied Materials faces a tough second half").

Cisco (Research) remains a leader in the networking systems that run the Internet. Now that the company has revenues of more than $25 billion, however, it's hard to keep up the blistering growth of a small tech stock. Nonetheless, Cisco is developing businesses such as security, storage and voice-over-Internet services. The result should be long-term growth that more than justifies today's P/E multiple.

FedEx (Research), the world's largest air-express carrier, posted strong results for the most recent quarter and raised its full-year forecast. The company's basic air-express service remains strong. And both international and domestic ground service are also doing well (see "FedEx delivers higher-than-expected earnings").

Staples (Research) is the leading retail chain for office supplies. Results for the most recent quarter were strong across the board. Most important for continuing gains, the company plans to open 100 stores a year in North America, as well as stores overseas. Sales for direct delivery are growing even faster (see Sivy on Stocks: "Steady demand for Staples").

Target (Research) has a successful formula for discount retailing. Total sales were up 8.6 percent over the past year. And same-store sales for April are projected to come in with a gain of at least 9 percent.

Texas Instruments (Research) is one of the best-positioned companies in the semiconductor industry. Overall, the industry outlook is improving. And TI is a leader in the kinds of chips that are used in the latest models of digital televisions (see Sivy on Stocks: Texas Instruments: "In the chips").

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