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Sep 2019
Sep 2024
Top 6 Stocks To Buy Right Now
Our repeated backtests have shown that high-quality companies outperform the market over the long term, period. This is a list of the highest-quality companies in our coverage. But we don’t just stop there. We also consider the timeliness of investing in these names by not only analyzing the companies in a vacuum but by looking at quality and valuation compared to peers using the latest available data.
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.
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. On top of that, its robust profit margins provide the capacity to reinvest or return capital to shareholders. This is one of our top software stocks.
SPX Technologies (SPXC)
SPX Technologies (NYSE:SPXC) is an industrial conglomerate catering to the energy, manufacturing, automotive, and aerospace sectors.
Why We Like It:
SPX Technologies’s rising free cash flow margin gives it more chips to play with and its expanding operating margin shows it’s becoming a more efficient business. No coincidence the stock is up 285% over the last five years.
Sterling (STRL)
Involved in the construction of a major highway, the Grand Parkway in Houston, TX, Sterling Infrastructure (NASDAQ:STRL) provides civil infrastructure construction.
Why We Like It:
Sterling is a financial powerhouse. Its unique marriage of high revenue growth and profitability gives it attractive return potential. Additionally, its rising free cash flow margin gives it more chips to play with. No coincidence the stock is up 1,425% over the last five years.
Broadcom (AVGO)
Originally the semiconductor division of Hewlett Packard, Broadcom (NASDAQ:AVGO) is a semiconductor conglomerate spanning wireless communications, networking, and data storage as well as infrastructure software focused on mainframes and cybersecurity.
Why We Like It:
Semiconductors are the lifeblood of technology and Broadcom produces some of the finest. On top of that, its solid free cash flow generation gives it many reinvestment options. No coincidence the stock is up 599% over the last five years.
Philip Morris (PM)
Founded in 1847, Philip Morris International (NYSE:PM) manufactures and sells a wide range of tobacco and nicotine-containing products, including cigarettes, heated tobacco products, and oral nicotine pouches.
Why We Like It:
Philip Morris’s abundant cash generation and high returns on capital lay the groundwork for success. Furthermore, its best-in-class gross margins demonstrate its products command premium prices. This is a fantastic business you don’t see often.