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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 best-in-class 43.6% free cash flow margins give it the resources it needs to beat the competition. Furthermore, 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 is exceptional. Its 46.7% annual revenue growth sets it apart and its efficient sales engine produces significant cash that can be reinvested into new products. We believe this is one of the best software stocks in the world.
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 combination of high free cash flow margins and market-beating ROICs shows it can produce cash and invest it wisely. On top of that, its rising free cash flow margin gives it more chips to play with. No coincidence the stock is up 260% 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’s potential is so outstanding it makes up triple check our models. Its impressive revenue growth, exceptional profitability, and promising outlook make this a business we can’t afford to miss. No coincidence the stock is up 222% 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 stands out in what is generally considered a mature sector. Its sales have grown wonderfully and analysts predict its winning ways will continue. Additionally, its surging backlog proves it has a healthy sales pipeline. No coincidence the stock is up 646% 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. On top of that, its excellent projected revenue growth suggests it’s poised to win significant market share. No coincidence the stock is up 403% 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 on a rapid growth trajectory, and experts forecast its innovative products will lead to sustainable gains in revenue, users, and ARPU. Furthermore, its rising free cash flow margin gives it more chips to play with. Any surprise this is one of our favorite stocks?
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.