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3 Market-Beating Stocks on Our Watchlist
The best-performing stocks typically have robust sales growth, increasing margins, and rising returns on capital, and those that can maintain this trifecta year in and year out often become the legends of the investing world.
Long story short, there is a near-perfect correlation between consistent earnings growth and huge winners. Taking that into account, here are three market-beating stocks with room for further growth.
MACOM (MTSI)
Five-Year Return: +284%
Founded in the 1950s as Microwave Associates, a communications supplier to the US Army Signal Corp, today MACOM Technology Solutions (NASDAQ: MTSI) is a provider of analog chips used in optical, wireless, and satellite networks.
Why Does MTSI Stand Out?
- Annual revenue growth of 30.9% over the last two years was superb and indicates its market share increased during this cycle
- Projected revenue growth of 49.9% for the next 12 months indicates demand will rise above its two-year trend
- Earnings per share have comfortably outperformed the peer group average over the last five years, increasing by 18.1% annually
At $242.50 per share, MACOM trades at 33.3x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
DXP (DXPE)
Five-Year Return: +543%
Founded during the emergence of Big Oil in Texas, DXP (NASDAQ:DXPE) provides pumps, valves, and other industrial components.
Why Should You Buy DXPE?
- Annual revenue growth of 16.8% over the last five years was superb and indicates its market share increased during this cycle
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 22.5% exceeded its revenue gains over the last two years
- Free cash flow margin expanded by 4 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
DXP is trading at $179.86 per share, or 26x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
LPL Financial (LPLA)
Five-Year Return: +137%
As the nation's largest independent broker-dealer with no proprietary products of its own, LPL Financial (NASDAQ:LPLA) provides technology, compliance, and business support services to independent financial advisors and institutions who manage investments for retail clients.
Why Is LPLA a Good Business?
- Annual revenue growth of 33.9% over the last two years was superb and indicates its market share increased during this cycle
- Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- ROE punches in at 37.1%, illustrating management’s expertise in identifying profitable investments
LPL Financial’s stock price of $345.27 implies a valuation ratio of 13.1x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.