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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.
It’s clear there’s a strong connection between sustained earnings growth and hall-of-fame returns. Taking that into account, here are three market-beating stocks that could turbocharge your returns.
Five-Year Return: +196%
With security scanners deployed at airports and borders worldwide and patient monitors used in hospitals across the globe, OSI Systems (NASDAQ:OSIS) designs and manufactures specialized electronic systems for security screening, patient monitoring, and optoelectronic applications.
Why Could OSIS Be a Winner?
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Annual revenue growth of 15.8% over the last two years was superb and indicates its market share increased during this cycle
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Operating profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
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Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 22.7% annually
At $234 per share, OSI Systems trades at 23.2x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Five-Year Return: +221%
Originally founded as an outsourcing company in 1999 before evolving into a technology-focused enterprise, EXL (NASDAQ:EXLS) provides data analytics and AI-powered digital operations solutions that help businesses transform their operations and make better decisions.
Why Will EXLS Beat the Market?
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Market share has increased this cycle as its 15.1% annual revenue growth over the last five years was exceptional
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Share repurchases over the last five years enabled its annual earnings per share growth of 25.5% to outpace its revenue gains
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Robust free cash flow margin of 11.5% gives it many options for capital deployment
EXL is trading at $43 per share, or 22.1x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Five-Year Return: +307%
Born from the 2020 merger of Rubicon Project and Telaria, Magnite (NASDAQ:MGNI) operates the world’s largest independent sell-side advertising platform that automates the buying and selling of digital advertising inventory across all channels and formats.
Why Are We Bullish on MGNI?
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Market share has increased this cycle as its 33% annual revenue growth over the last five years was exceptional
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Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 22.8% outpaced its revenue gains
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MGNI is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its growing cash flow gives it even more resources to deploy
