Investors often erroneously believe that a stock needs to be climbing higher to be defined as a growth stock.  Obviously, a stock that’s share price is moving higher is growing but this is not the definition of a growth stock.

Most financial professionals define growth stocks as being stocks of companies that are in the growth/expansion stage.  It really doesn’t have to do with the price of the stock.  In fact, it’s usually smarter to purchase the stock of a growing company after it has been knocked lower in price.

With this in mind, Wealthpire’s premium advisory Momentum Trading Profits recently recommended a growing stock, that also pays decent dividends, after it was knocked substantially lower on the year.

After the suggested purchase, shares have started to bounce higher toward the target price.

The stock is fashion company Guess? (NYSE:GES).

Momentum Trading Profits pointed out that there has also been insider buying on the stock. In addition, made the observation that this is a cash-rich company, since the total cash position on its balance sheet is $466.54 million and its total debt is just $9.17 million. Here is the buy low and sell high set-up that you have been waiting for!

Last month, Guess reported disappointing second-quarter fiscal results and also lowered its fiscal 2015 outlook. With the weaker than expected earnings news, the shorts clobbered the stock. For the third quarter, the company expects revenues in the range of $590 to $600 million, lower than last year’s revenues of $613 million; so while the news was negative, the downdraft appears to be an over-reaction and for investors with a six month time horizon, this stock could yield double-digit returns in no time.

Action to Take:

Continue to hold longs as the price pushes toward the target.