In this article, we will take a look at stocks that outperform the broader market.
Imagine choosing a group of stocks that not only weathered the market’s storm but also outpaced its peers. Clearly, a win. Such is the case of these 15 stocks that delivered returns greater than what the market had to offer over the last three years. Before we get down to those top-tier winners, let’s discuss what the broader market index actually is.
This may not be something new to seasoned investors. As one of the most widely known benchmarks of the United States, the S&P Index is considered the best gauge of notable American equities’ performance and the health of the economy, in general. Covering around 80% of market capitalization, the S&P is a float-weighted index, which means that the market capitalizations of all the companies included are adjusted by the volume of shares available for trading publicly. Since it’s an index, you can’t just invest in it directly, but rather you can invest in one of the many funds that use it as a benchmark and measure the overall performance.
As a research report by Alex Frino and David R. Gallagher stated:
“Over long horizons, index funds tracking the index consistently outperform the majority of actively managed funds, reflecting the efficiency of broad-market exposure.”
This highlights that S&P index funds generally deliver better results than most actively managed funds.
If we look at the 5-year trend for the broader market, the index witnessed a growth of around 105%. While this may be a decent growth rate, it’s not something truly amazing. The stocks in the index tumbled in 2022, mainly owing to the FED’s shift in monetary policy, the Russia-Ukraine war, and lingering post-COVID supply chain disruptions. Even after this period, the trendline is not something that would break records or catch an eye. In a span of 3 years, the stocks have witnessed a growth of 32%, which is just decent in this high-growth world.
From energy, agriculture, and finance to gold mining, automotive, technology, and construction industries, the companies have showcased strong returns in a short period. This is a result of favorable macroeconomic policies for these markets, particularly with Trump back in office. The stocks we have favored are the ones featuring good performance in the past, as well as the ones surrounding optimism in the future. Thus, we can safely say that it’s still not too late to invest in these stocks. As the elders used to say, “The best time to plant a tree was 20 years ago. The second-best time is now.”
Stocks chart
Our Methodology
We have taken a list of 15 companies from Finviz and Yahoo Finance that have witnessed a growth rate of more than 32%, witnessed by the S&P index funds, over three years. These companies then have been listed in descending order, from the highest growth to the lowest growth. The trend line has been captured from Google’s latest stock prices, with respect to the returns of the respective shares.
At Insider Monkey, we are obsessed with hedge funds. 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
15. Valmont Industries, Inc. (NYSE:VMI)
3-Year Return as of the Close of March 12: 43%
Valmont Industries, Inc. (NYSE:VMI), headquartered in Omaha, Nebraska, manufactures products for the infrastructure and agriculture sectors. The company aims to modernize essential infrastructure and enhance agricultural productivity by adopting innovative systems. With two main segments, namely Infrastructure and Agriculture, Valmont serves 7 markets across six continents and 21 different countries. The company’s dedication towards pricing discipline and cost structure improvements seems to be really paying off.
This mid-cap stock witnessed a share price increase of around 49% in just a year. With a 2.4% dip in sales reported in 2024, the company proved that robust performance doesn’t always derive from sales growth. Analysts are optimistic about Valmont Industries, Inc. (NYSE:VMI), expecting a surge in EPS and net sales from the prior year by 2.7% and 5.6%, respectively.
There are many reasons to believe that the company will witness a demand hike. The demand for power is anticipated to increase, if not remain consistent, due to electrification, industrialization, and the rise of data centers. Thus, this trend of utility companies fueling their infrastructure investments is going to last a long time. We can safely say that the future of Valmont Industries, Inc. (NYSE:VMI) will also be bright.
Additionally, Valmont Industries, Inc. (NYSE:VMI) has yet to reap the full benefits of its Bipartisan Infrastructure Deal. A deal that brought $110 billion in funding for repairing roads, bridges, and rails across the United States, carries the strength to drive the demand for infrastructure products, boosting VMI’s success for years to come.
14. GoDaddy Inc. (NYSE:GDDY)
3-Year Return as of the Close of March 12: 123%
GoDaddy Inc. (NYSE:GDDY) is an Arizona-based services platform that claims to do more than just sell domain names. The company’s extensive portfolio includes domain registration, website building, hosting, digital marketing and e-commerce solutions, websites + marketing, managed WordPress, and GoDaddy Airo, an AI-powered business solution. This allows the company to target a varied clientele, mainly small businesses, individuals, organizations, developers, designers, and domain investors across multiple industries. With a presence in the UK, Canada, India, and Australia, it helps accelerate the growth of millions.
In the past three years, GoDaddy Inc. (NYSE:GDDY) has spurred as high as 120% returns, with growth largely reflected in 2024. Surpassing their Investor Day targets, the company was able to drive top-line bookings of over 9% and elevated bottom-line normalized EBITDA margins to 31% in the past year. That being said, the company made waves with its annual bookings, recorded at $5 billion. To the company’s surprise, pricing and bundling delivered substantial returns throughout the year, resulting in a 21% applications and commerce bookings expansion.
The management has a constructive strategy for 2025. All their efforts will surround presence products and targeted audiences across Applications and Commerce, and Core Platform segments within the hosting business. Simultaneously, they will work towards the development of this approach for 2026 and beyond.
The future direction of GoDaddy Inc. (NYSE:GDDY) seems to be all figured out. We can also expect the company to focus on technology and AI, particularly within the GoDaddy Airo domain. This will not only improve the cost structures but also enhance the overall customer experience. With Airo increasingly gaining traction, we believe it to be the growth catalyst driving customer lifetime value.
Based on the 12-month forecasts by 15 Wall Street analysts in the last 3 months, the stock will witness an average of 30% upside, with the price standing at $224.08. Surely, the company could be a top pick for investors.
13. Fiserv, Inc. (NYSE:FI)
3-Year Return as of the Close of March 12: 124%
Fiserv, Inc. (NYSE:FI) is a Wisconsin-based payment and financial services technology provider. With a global presence across North America, Europe, the Middle East, Africa, Latin America, and Asia-Pacific, Fiserv considers itself on a mission to drive the flow of money and information to shape the world. The company offers various products and services, including payment and mobile banking systems, account processing systems, financial solutions, network services, and lending and risk management solutions.
Clover is considered the main asset of Fiserv, Inc. (NYSE:FI). This growth driver witnessed a 29% revenue surge in FY24, and with a positive macro environment, the figure is expected to rise even more in the current year. Bob Hau, Chief Financial Officer of Fiserv, made the following comment:
“Drilling down by segment, for Merchant Solutions, we see organic revenue growth of 12% to 15% in 2025, driven mostly by strong growth in Clover, as we reach our $3.5 billion revenue target, including an increase in vast penetration to the 25% outlook. Our ability to achieve these goals is supported by opportunities we advanced in 2024 with five new hardware rollouts and three new geographics.”
Another development is the company’s partnership with ADP to build a Small Business Management Platform, thus allowing micro-enterprises to manage their inflows and outflows easily. According to the agreement, the companies will form an integrated solution that combines the expertise of ADP’s small business payroll and human resources solution, RUN Powered by ADP, and Fiserv’s small business management platform, Clover. What makes this even more interesting is that Clover will also be offered through ADP’s distribution channel, which could enable Fiserv, Inc. (NYSE:FI) to reach a wider audience.
Based on the 12-month price forecasts by 25 Wall Street analysts over three months, the average price is $253.91, with a high forecast of $278 and a low forecast of $220. Additionally, analysts have a consensus “Strong Buy” rating on the stock. With historic returns higher than the peers, and the optimism surrounding the future of Fiserv, Inc. (NYSE:FI), we can safely consider it a bull.