Our list highlights the best stocks you’ll wish you bought sooner.

Markets often reward those investors who spot inflection points before they become widely known. As the market looks beyond some of the larger names that have dominated the performance scene, a new set of opportunities may emerge in stocks with an attractive combination of improving fundamentals and undervalued potential. These are the types of names that, in hindsight, investors often say they “wish they had bought sooner.”

Morgan Stanley’s latest outlook underpins this thought.  The bank remained bullish on the markets and raised its 12-month S&P 500 target to 7,800 on November 17. As per Mike Wilson, Chief U.S. Equity Strategist and CIO at Morgan Stanley, this revision was driven by a sharp reversal in previously negative policy and earnings expectations.

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Wilson noted that recent policy actions have been more constructive than anticipated. In addition, a more supportive Federal Reserve stance is now acting as a tailwind, reinforcing the positive earnings revision cycle. He further stated:

“There’s a fork in the road now, as Yogi Berra would say, take it. We’re going to take the fork towards the broadening out. And that would be areas like consumer discretionary, some of the financials that have not performed. Some of the financials have done really well. But there are parts of the financial sector that haven’t done well. Transports, that’s an area that’s really suffered. Some of the commodity patch hasn’t done particularly well; consumer goods over services. So, there are plenty of things in the market that have not worked yet, that don’t have high multiples, where the earnings are going to surprise on the upside. You get multiple expansion and earnings growth.”

That said, big tech is expected to continue posting stronger returns, according to Dan Ives, Global Head of Technology Research at Wedbush. As discussed on CNBC on December 2, Ives forecasts around 20% returns for the tech sector in 2026, with the so-called AI-revolution stocks to be up a minimum of 20%. According to him, we are at the beginning of the monetization of the AI revolution.

With that background, let us explore the 11 best stocks you’ll wish you bought sooner. Our selection focuses on companies that hold strong competitive positions, post consistent returns, and have exposure to long-term structural trends.

Our Methodology

To identify the best stocks for this article, we began by screening U.S.-listed companies with a market capitalization of over $2 billion and total returns of at least 50% over the past three years. From this universe, we narrowed the list to companies with a five-year average return on equity above 20% and a free cash flow margin exceeding 20%. We then filtered for stocks offering a minimum upside potential of 15%-20%. Finally, we ranked the top 11 stocks in ascending order of hedge fund ownership, using Insider Monkey’s Q3 2025 data.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).

Note: All pricing data is as of market close on December 4, 2025.

11 Best Stocks You’ll Wish You Bought Sooner

11. Corcept Therapeutics Incorporated (NASDAQ:CORT)

Price Return Over 3 Years: 261.8%

Return On Equity: 23.3%

Potential Upside: 62.4%

Number of Hedge Fund Holders: 28

Corcept Therapeutics Incorporated (NASDAQ:CORT) is among the best stocks you’ll wish you bought sooner.

As of the close of December 2, the consensus shows that analyst opinions are highly favourable towards Corcept Therapeutics Incorporated (NASDAQ:CORT), with 80% of analysts covering it assigning a Buy or equivalent rating, and none assigning a Sell rating. With a consensus 1-year median price target of $137.50, the analysts still see a 70% upside potential.

On November 25, H.C. Wainwright analyst Swayampakula Ramakanth reiterated a bullish stance on the stock, reaffirming his Buy rating and a consensus high price target of $145.00.

The analyst believes that Corcept Therapeutics (NASDAQ:CORT) remains well-positioned for solid growth despite recent commercial challenges with its core product, Korlym. Despite these headwinds, he notes that volume trends have strengthened meaningfully over the past two quarters, supporting the guidance for FY2025 revenue growth of 19%-26%, which implies $800–$850 million in revenue.

Ramakanth also believes that Corcept’s pipeline provides ample medium- to long-term catalyst. The company is advancing its oral therapy relacorilant in two severe disorders, with PDUFA dates of December 30, 2025, for Cushing’s syndrome, and July 11, 2026, for ovarian cancer. The analyst’s estimates suggest that relacorilant could generate up to $4.3 billion in annual revenue by 2034, highlighting significant upside potential.

Corcept Therapeutics Incorporated (NASDAQ:CORT), a commercial-stage biopharmaceutical company engaged in the discovery and development of medications to treat severe endocrinologic, oncologic, metabolic, and neurologic disorders.

10. InterDigital Inc. (NASDAQ:IDCC)

Price Return Over 3 Years: 608.1%

Return On Equity: 24.3%

Potential Upside: 28.3%

Number of Hedge Fund Holders: 35

InterDigital Inc. (NASDAQ:IDCC) is among the best stocks you’ll wish you bought sooner.

On November 24, William Blair analyst Arjun Bhatia reaffirmed his Buy rating on the stock without assigning a price target. This reiteration followed the company’s announcement of favourable legal judgments in its patent infringement cases against Disney in Germany and Brazil.

The analyst believes that these decisions bode well for the potential monetization of the company’s streaming technology patents. In his earlier note on November 11, Bhatia argued that these rulings could create significant revenue opportunities, which he estimated would exceed $300 million by 2030.

On November 24, InterDigital Inc. (NASDAQ:IDCC) announced that the Munich Regional Court issued a second injunction against Disney for infringement of a patent related to the streaming of video content using high dynamic range (HDR) technology. Earlier, this same court had issued another injunction in an infringement case involving a patent that enables dynamically overlaying a first video stream with a second video stream.

This success was preceded by another victory, announced by the company on September 3, when a court in Brazil issued an injunction against Disney for infringing two of InterDigital’s AVC and HEVC video coding patents.

A week later, InterDigital Inc. (NASDAQ:IDCC) initiated litigation against Amazon for patent infringement related to video compression and improving picture quality through high dynamic range (HDR) technology. The case is ongoing in various jurisdictions.

InterDigital Inc. (NASDAQ:IDCC) is a global research and development company focused primarily on wireless, video, artificial intelligence, and related technologies. The company licenses its technologies to companies, including makers of wireless communications devices, consumer electronics, IoT devices, cars and other motor vehicles, and providers of cloud-based services such as video streaming.

9. AppFolio Inc. (NASDAQ:APPF)

Price Return Over 3 Years: 103.2%

Return On Equity: 20.6%

Potential Upside: 37.9%

Number of Hedge Fund Holders: 40

AppFolio Inc. (NASDAQ:APPF) is among the best stocks you’ll wish you bought sooner. As of December 1, the company is a consensus Buy, and its 1-year median price target of $325 indicates a strong 43% upside.

However, AppFolio Inc. (NASDAQ:APPF)’s share price has been volatile recently, as noted by DA Davidson analyst Gil Luria in a November 19 note. Following the company’s recent Investor Day, Luria reaffirmed a Buy rating and maintained a $325 price target, according to TheFly.

At the investor day on November 18, management declined to provide long-term financial guidance, prompting a negative market reaction. The share price was down as much as 7.5% on the day but settled at -4.3% by the close. However, Luria viewed this response as “unjustified”, considering the strong underlying business fundamentals and healthy growth trends. In his view, the absence of long-term targets does not change the company’s growth trajectory, and AppFolio Inc. (NASDAQ:APPF) has ample opportunities to expand monetization.

While management did not provide any forward guidance at the event, they emphasized their focus on growing operating cash flow per share through profitable revenue growth, accelerating the adoption of premium-tier and value-added services, and cost discipline.

Apart from Luria, Piper Sandler analyst Hannah Rudoff, along with analysts from KeyBanc and William Blair, also reiterated their Buy ratings and price targets.

AppFolio Inc. (NASDAQ:APPF) provides a cloud-based property management platform for residential, commercial, and community association real estate operators.