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9 Best Market-Beating Stocks
Here are businesses that have shown cream-of-the-crop quality past and present. They boast unique combinations of attributes such as robust revenue growth, healthy profits, increasing free cash margins, and unmatched returns on invested capital. The market has rewarded them for this, but the party isn’t over yet. We think there is more market outperformance to come.
Microsoft (MSFT)
Short for microcomputer software, Microsoft (NASDAQ:MSFT) is the largest software vendor in the world with its Windows operating system, Office suite, and cloud computing services.
Why We Like It:
Despite its massive scale, Microsoft has posted solid revenue growth over the last five years. It also boasts a rare competitive moat that materializes into durable pricing power and some of the best profit margins across all public companies.
Palantir (PLTR)
Started by Peter Thiel after seeing US defence agencies struggle in the aftermath of the 2001 terrorist attacks, Palantir (NYSE:PLTR) offers software as a service platform that helps government agencies and large enterprises use data to make better decisions.
Why We Like It:
Palantir’s bountiful free cash flow gives it the ability to invest in many ventures. Additionally, its excellent projected revenue growth suggests it’s poised to win significant market share. We believe this is one of the best software stocks in the world.
Monday.com (MNDY)
Founded in 2014 and named after the dreaded first day of the work week, Monday.com (NASDAQ:MNDY) is a software-as-a-service platform that helps organizations plan and track work efficiently.
Why We Like It:
Monday.com’s efficient sales engine, remarkable revenue growth, and bountiful free cash flow generation position it as a winner in the competitive software-as-a-service market. Any surprise this is one of our favorite stocks?
Trane Technologies (TT)
With low-pressure heating systems as the first product, Trane (NYSE:TT) designs, manufactures, and sells HVAC and refrigeration systems, the former to commercial and residential building customers and the latter to commercial truck manufacturers.
Why We Like It:
Trane Technologies’s investments generate heaps of cash that are plowed into even more investments, creating a virtuous cycle of returns. Additionally, its rising free cash flow margin gives it more chips to play with. No coincidence the stock is up 231% over the last five years.
Badger Meter (BMI)
The developer of the world’s first frost-proof water meter in 1905, Badger Meter (NYSE:BMI) provides water control and measure equipment to various industries.
Why We Like It:
Badger Meter prints so much cash we should call it Jerome Powell. Its sensational revenue growth, extraordinary profitability, and superb prospects make it a business we need to own. No coincidence the stock is up 203% over the last five years.
Quanta (PWR)
A construction engineering services company, Quanta (NYSE:PWR) provides infrastructure solutions to a variety of sectors, including energy and communications.
Why We Like It:
Quanta is one of the fastest-growing industrials companies. Wall Street expects its revenue to grow 13.8% over the next 12 months. Additionally, its eye-popping 21.8% annualized EPS growth over the last five years has significantly outpaced its peers. No coincidence the stock is up 616% over the last five years.
Nova (NVMI)
Headquartered in Israel, Nova (NASDAQ:NVMI) is a provider of quality control systems used in semiconductor manufacturing.
Why We Like It:
Nova’s deep technical expertise empowers it to create some of the most innovative semiconductor products. Furthermore, its excellent projected revenue growth suggests it’s poised to win significant market share. No coincidence the stock is up 371% over the last five years.
Reddit (RDDT)
Founded in 2005 by two University of Virginia roommates, Reddit (NYSE:RDDT) facilitates user-generated content across niche communities (called subreddits) that discuss anything from stocks to dating and memes.
Why We Like It:
Reddit is growing like crazy. Experts predict its innovative products will fuel sustainable gains in revenue, users, and ARPU. Furthermore, its rising free cash flow margin gives it more chips to play with. We believe this is one of the best internet stocks in the world.
Wingstop (WING)
The passion project of two chicken wing aficionados in Texas, Wingstop (NASDAQ:WING) is a popular fast-food chain known for its flavorful and crispy chicken wings offered in a variety of sauces and seasonings.
Why We Like It:
Wingstop has the secret formula. It not only sports a promising outlook but also grows sales rapidly while printing profits, giving it sky-high return potential. We believe this is one of the best restaurant stocks in the world.