(FORTUNE Magazine) – Not so long ago, you'll recall, growth was a good thing. Unquestionably a good thing. CEOs promised to deliver it at all costs, investors gobbled it up (at all costs), and companies that didn't post eye-popping numbers paid what was then the ultimate cost--a languishing share price. Of course, that was a time when an Arthur Andersen audit seemed like a good idea too.

Oh, how things change. These days surging sales and profits are more likely to inspire skepticism than adulation. Bob Turner, chief investment officer at Turner Investment Partners, notes that as growth stories at Gap, Tyco, and WorldCom have turned into horror stories, investors are rightly wrestling with how much growth is real and how much is due to serial acquisitions or dodgy accounting. Many others aren't waiting to find out. Investors have made pariahs out of growth firms of late: Between June 2001 and June 2002, they pulled $46.5 billion out of growth mutual funds and sank $77.9 billion into those that focus on value stocks, according to fund tracker Lipper.

Even on FORTUNE's list of the fastest growers, the juice just ain't what it used to be. In 1999 the median revenue growth rate on our list was 63%; that dropped to 42% this year. Earnings-per-share growth fell from 69% to 48% over the same time, and total return declined from 39% to 27%.

Still, given all the stumbles and slides in corporate America over the past year, many of the companies on our list look like Olympic sprinters. Some--including teen retailer Hot Topic and Chinese fast-food chain P.F. Chang's--have managed to prosper by dominating modest-sized niches and serving them with voracious drive. Others have used their size to muscle out weaklings in these lean times. Paced by homebuilder Lennar, over one-third of our fastest growing this year qualified as FORTUNE 1,000 firms, with at least $1.18 billion in revenues. (That's almost double the number that did so in 2000.) With only the strong surviving, "It seems Darwin's law is kicking in," says Turner. Also of note, nearly 20% of FORTUNE's fastest-growing companies--and half of the top ten--are in the oil and gas business, mostly through exploration and production. Though commodity prices crashed last year, members of this group still made the list in such numbers because our methodology factors in three years of earnings growth, revenue growth, and total return to shareholders.

The three companies profiled below, however, also share two additional traits you may not associate with the fast and the furious--each has a strong balance sheet and a long-tenured management team. While that doesn't mean their stocks won't stumble with the rocky market and economy, such old-time conservative values may help their chances of making our list next year. Yes, times have changed.

Niche player HOT TOPIC, No. 10 City of Industry, Calif.

"Do you have any Misfits T-shirts?" asks 14-year-old Mike Capomaggi as he checks out the Hot Topic store at the Garden State Plaza in Paramus, N.J., on a recent summer afternoon. Twenty-four-year-old assistant manager Tara Fritsch, who sports a tongue stud, a pierced lip and nose, a pink tank top, and matching eyeshadow, cheerfully obliges. While Fritsch helps Capomaggi, the saccharine pop sounds of Reggie and the Full Effect blare over the sound system, and a preteen girl shrieks in delight as she finds a SpongeBob SquarePants folder in the back-to-school display. "This is the only place I shop," confides Aileen Valca, 13, who walks out with a Happy Noodle Boy T-shirt ($18) and an Invader Zim journal ($9.99).

She's not the only one whose Hot Topic loyalties run deep. Since 1989, when it opened its first store in California, Hot Topic has provided suburban teens with an edgy alternative to mainstream stores. In fact, analysts estimate that 75% of Hot Topic's merchandise--dragon hemp necklaces, cupcake-pink hair dye, and Incubus T-shirts--is not available anywhere else in the mall.

The stores cater to what Michael Wood, vice president of Teenage Research Unlimited, terms "edge teens," who are often in the vanguard of fashion. They are also passionate about their favorite bands, whose T-shirts account for a nice chunk of wall space in every Hot Topic. But the stores aren't just for outcast teens: Witness Carlos Rodriguez, a 31-year-old clad in khakis and a white polo shirt, who picks up a Black Sabbath T-shirt.

A steady stream of new customers has helped Hot Topic pull off that rarest of retail feats: growing fast (it has made our list three years in a row, and its more than 400 stores will generate $415 million in sales this year, up 146% over 2000) without losing touch with its roots. It does so, in part, through fanatical attention to customer feedback, much of it in the form of shopper "report cards." CEO Betsy McLaughlin pores over 1,000 of them each week. What's more, short lead times (stock is replenished in 14 to 60 days) allow the company to act upon trends much more quickly than its retail peers. Staying current extends to the stores themselves: As the goth trend loses steam, Hot Topic stores have ditched their gloomy gated entrances for a more inviting, club-inspired tunnel motif. "Teens love stores that belong to them, and this is one of those stores," says Wood.

But like a teenage crush, Hot Topic has proved a bit fickle. Poor sales of men's apparel recently forced the company to ratchet down expectations for the back-to-school season. As with dozens of companies that appear on our list each year, the saying "Live by the trend, die by the trend" applies. Still, Hot Topic's shares, which are down 13% over the past year, are well ahead of those of other teen retailers like American Eagle (down 54%).

Not content to conquer one niche, McLaughlin has set her sights on another underserved, potentially lucrative market segment. After getting many requests for plus-size apparel (sizes 14 to 26), Hot Topic added a plus-size page to its website in 1999, and within hours orders were piling in. McLaughlin decided to spin the concept out as Torrid, which targets the roughly 25% of women aged 15 to 34 who are size 14 or larger--that's 9.5 million potential customers in the U.S. alone. But it's not just about demographics--plus-size women have shed their wallflower reputation and are brimming with confidence, demanding trendy, form-fitting clothing. Rebecca Marshall, 24, an early customer of Torrid now working at the Paramus store, says customers have come from as far as Delaware and Philadelphia to shop. Even Manhattan businesswomen have popped in, searching for outfits that they can go clubbing in. And when you can persuade New Yorkers to go to Jersey, you're on to something.

A big advantage LENNAR, No. 61 Miami

A ceramic-tiled entry welcomes you into the "Azalea," which comes complete with "elegant crown moldings," vaulted ceilings, and his-and-hers sinks in the master bathroom. This four- bedroom, two-story home, one of Lennar's more popular models, sells for $238,000.

Spurred by low interest rates, Americans are buying homes like the Azalea at an astounding clip. Sales of new homes hit a record 906,000 units last year, according to Harvard's Joint Center for Housing Studies, and are on pace to top one million this year. What's more, the supply of homes actually dipped slightly in June, another sign of the market's continued virility.

In this environment the large public homebuilders--possessing economies of scale and voracious M&A appetites--are grabbing more of the pie. According to Raymond James & Associates, market share for the five largest public homebuilders (Lennar is No. 2, after Pulte) grew from 4.1% in 1991 to 11.6% in 2000.

But as much as the national giants like Pulte and Centex have grown and consolidated, homebuilding remains an industry in which local knowledge--of home styles, zoning laws, subcontractors, even migratory habits of endangered species--is essential. And a personal touch toward customers and employees goes a long way. In that regard, no one does it better than Lennar.

With $6 billion in sales last year from almost 24,000 homes, Lennar has made a habit of zigging while the homebuilding industry has zagged. The company entered downtrodden Texas and California markets in 1991 and 1995, respectively, when competitors shied away because of falling prices, and it pioneered an everything-included, one-size-fits-all approach to homebuying when customization was all the rage. "I think that our nature is not to be part of the herd," says CEO Stuart Miller, son of real estate legend Leonard, who co-founded Lennar (then called F&R Builders) with $10,000 in the mid-1950s. After a two-year battle with liver cancer, Leonard Miller died in late July.

In 2000, Lennar swallowed up rival U.S. Home in a landmark $1.1 billion deal. The acquisition gave Lennar access to bustling regions like Colorado, New Jersey, and Maryland as well as a foothold in the lucrative "active adult" market, which includes age-restricted retirement communities.

But rather than forcing U.S. Home to adopt an everything's-included approach, Lennar allowed it to maintain its customized offerings, often across the street from existing Lennar offices. This dual marketing platform is now available in 142 communities nationwide. "Bigger isn't better," says Miller. "Better is better." Of U.S. Home's 34 division presidents, 33 are still with Lennar today.

Lennar has continued to grow via acquisitions, but unlike serial acquirers like Tyco, Lennar has done shrewd deals that make sense in both the short and the long term. Take its recently completed $27.7 million deal for the Fortress Group, which prompted Credit Suisse First Boston analyst Ivy Zellman to suggest that Lennar management conduct a seminar for some of its peers on creating shareholder value. (Its stock is up 11% over the past year.) Lennar recently beat second-quarter earnings estimates by 22% and raised its 2003 earnings estimates by 50 cents. Its housing backlog (12,111 units, worth $3.06 billion) and clean balance sheet ($461 million in cash in its most recent quarter) should provide protection if interest rates rise.

Energy rules XTO ENERGY, No. 5 Fort Worth

In the cutthroat gas business, the best way to outplay bigger competitors is sometimes simply to observe them. In the late 1990s, while much bigger rival Anadarko impressed Wall Street by hungrily drilling through East Texas (earning plaudits from FORTUNE in last year's list of the fastest growing), its low-key neighbor XTO took a different tack: Its engineers and geologists patiently watched and learned before XTO carefully began to drill and add to its 8,000-acre property in Freestone County.

The patience paid off. Over the past three years XTO's East Texas holdings in the Freestone area have blossomed to 94,000 acres, with gas production skyrocketing from 19 million cubic feet per day to 248 million. Now XTO boasts some of the richest deposits, or "pay zones," in East Texas and is the most aggressive driller in the area. "XTO never tried to drill as many wells as possible as quickly as possible," says Credit Lyonnais analyst Brad Beago. "Through a more steady program, XTO now controls the best rigs in the area and is looking pretty smart."

The company's strategy involves buying properties that energy giants like Shell own but have neglected or areas that smaller companies own but lack the funds to exploit. XTO then goes in and reworks the wells to enhance production and reduce operating costs. Since its inception in 1986, XTO has increased reserve volumes 83% at the properties it has acquired. While the 24 oil and gas exploration and production (E&P) companies monitored by Deutsche Bank are down 11% over the past year, XTO's stock is up 19%.

Like many of its counterparts in the E&P field, XTO--which derives about 84% of revenue from natural gas--thrived as robust economic growth bolstered demand and pushed natural gas prices to record highs in December 2000. But prices have fallen by a full two-thirds since then, and domestic natural gas production is slated to decline 2.3% this year.

Time to retrench? Quite the opposite, says XTO CEO Bob Simpson. His company will increase natural-gas production 20% this year. Simpson just closed a three-way acquisition that bolstered XTO's core geographies and will continue buying land in 2002. "High-rate volume growth in a mature, highly competitive business is very difficult to achieve," says Morgan Keegan analyst Subash Chandra, making companies like XTO "singular successes."

To be sure, the company has had growing pains: After doing $1 billion's worth of acquisitions between 1997 and 1999, XTO saw its debt-to-capital ratio balloon to 78%. It has since come down to around 50%. Veteran analysts say that's acceptable, mainly because XTO's reserves are "long life"--averaging almost 15 years--providing a good amount of visibility.

In that sense, XTO serves as a solid model for all our fastest-growing companies this year, many of which have learned that aggressive growth means little if not accompanied by sound strategy and experienced management that's willing to stick out the tough times. The growth rates may not always be eye-popping, but that's fine by them. "Sometimes we hit a home run, but we're going to at least hit a single," says XTO's Simpson. "These days, singles are enough for us."