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Sep 2019
Sep 2024
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.
ServiceNow (NOW)
Founded by Fred Luddy, who coded the company's initial prototype on a flight from San Francisco to London, ServiceNow (NYSE:NOW) is a software provider helping companies automate workflows across IT, HR, and customer service.
Why We Like It:
ServiceNow’s robust free cash flow enables it to invest in many ventures. Additionally, its strong projected revenue growth suggests healthy demand for its products. No coincidence the stock is up 207% over the last five years.
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:
Companies like Monday.com are special. Its 46.7% annual revenue growth puts it in a league of its own and its efficient sales engine generates mountains of cash. We believe this is one of the best software stocks in the world.
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.
Howmet (HWM)
Inventing the first forged aluminum truck wheel, Howmet (NYSE:HWM) specializes in lightweight metals engineering and manufacturing multi-material components used in vehicles.
Why We Like It:
Howmet’s rising free cash flow margin gives it more chips to play with and its expanding operating margin shows it’s becoming an even more efficient business. No coincidence the stock is up 1,077% over the last five years.
Federal Signal (FSS)
Developing sirens that warned of air raid attacks or fallout during the Cold War, Federal Signal (NYSE:FSS) provides safety and emergency equipment for government agencies, municipalities, and industrial companies.
Why We Like It:
Federal Signal’s surging backlog proves it has a healthy sales pipeline and its expanding operating margin shows it’s becoming an even more efficient business. This is one of our top industrials stocks.
FTAI Aviation (FTAI)
With a focus on the CFM56 engine that powers Boeing and Airbus’s planes, FTAI Aviation (NASDAQ:FTAI) sells, leases, maintains, and repairs aircraft engines.
Why We Like It:
FTAI Aviation is a world-class company. Its cocktail of high growth and exceptional profitability makes it a crown jewel in the investment community. No coincidence the stock is up 822% over the last five years.
KLA Corporation (KLAC)
Formed by the 1997 merger of the two leading semiconductor yield management companies, KLA Corporation (NASDAQ:KLAC) is the leading supplier of equipment used to measure and inspect semiconductor chips.
Why We Like It:
Semiconductors are the lifeblood of technology and KLA Corporation produces some of the finest. Additionally, its strong operating margins show it’s a well-run business. No coincidence the stock is up 317% 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 expanding at an incredible pace, with experts expecting its breakthrough products to fuel long-term growth in revenue, users, and ARPU. On top of that, its excellent gross margins demonstrate the value and prominence of its products. 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. This is one of the highest-quality restaurant stocks in our coverage.