3 Market-Beating Stocks with Exciting Potential

3 Market-Beating Stocks with Exciting Potential

Stocks that outperform the market usually share key traits such as rising sales, expanding margins, and increasing returns on capital. The select few that can do all three for many years are often the ones that make you life-changing money.

Long story short, there is a near-perfect correlation between consistent earnings growth and huge winners. Keeping that in mind, here are three market-beating stocks that could turbocharge your returns.

Copart (CPRT)

Five-Year Return: +212%

Starting as a single salvage yard in California in 1982, Copart (NASDAQ:CPRT) operates an online auction platform that connects sellers of damaged and salvage vehicles with buyers ranging from dismantlers and rebuilders to used car dealers and exporters.

Why Do We Love CPRT?

  1. Impressive 15.2% annual revenue growth over the last five years indicates it’s winning market share this cycle

  2. Incremental sales over the last five years have been highly profitable as its earnings per share increased by 18.3% annually, topping its revenue gains

  3. Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its growing cash flow gives it even more resources to deploy

Copart’s stock price of $54.59 implies a valuation ratio of 32.9x forward price-to-earnings. Is now a good time to buy? Find out in our full research report, it’s free .

Primoris (PRIM)

Five-Year Return: +219%

Listed on the NASDAQ in 2008, Primoris (NYSE:PRIM) builds, maintains, and upgrades infrastructure in the utility, energy, and civil construction industries.

Why Are We Fans of PRIM?

  1. Annual revenue growth of 20% over the last two years was superb and indicates its market share increased during this cycle

  2. Earnings per share have massively outperformed its peers over the last two years, increasing by 23.2% annually

  3. Acceptable returns on capital suggest management generated shareholder value by investing in profitable projects

Primoris is trading at $49.51 per share, or 13.2x forward price-to-earnings. Is now the right time to buy? See for yourself in our in-depth research report, it’s free .

Lennox (LII)

Five-Year Return: +178%

Based in Texas and founded over a century ago, Lennox (NYSE:LII) is a climate control solutions company offering heating, ventilation, air conditioning, and refrigeration (HVACR) goods.

Why Is LII Interesting?

  1. Operating profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient

  2. Earnings per share grew by 26.1% annually over the last two years, massively outpacing its peers

  3. ROIC punches in at 50.8%, illustrating management’s expertise in identifying profitable investments

OK