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.
It’s clear there’s a strong connection between sustained earnings growth and hall-of-fame returns. On that note, here are three market-beating stocks that could turbocharge your returns.
Vita Coco (COCO)
Return Since IPO: +257%
Founded in 2004 followed by a 2021 IPO, The Vita Coco Company (NASDAQ: COCO) offers coconut water products that are a natural way to quench thirst.
Why Do We Love COCO?
- Stellar 9.9% growth in unit sales over the past two years demonstrates the high demand for its products
- Earnings per share have massively outperformed its peers over the last three years, increasing by 70.9% annually
- ROIC punches in at 36.9%, illustrating management’s expertise in identifying profitable investments, and its returns are climbing as it finds even more attractive growth opportunities
Vita Coco’s stock price of $48.35 implies a valuation ratio of 30x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Reddit (RDDT)
Return Since IPO: +224%
Founded in 2005 by two University of Virginia roommates, Reddit (NYSE: RDDT) facilitates user-generated content across niche communities (called subreddits) that discuss anything from stocks to dating and memes.
Why Are We Bullish on RDDT?
- Domestic Daily Active Visitors have increased by an average of 15.9% annually, giving it the potential for margin-accretive growth if it can develop valuable complementary products and features
- Strong engagement trends coupled with 45.1% annual growth in its average revenue per user demonstrate its platform’s stickiness with die-hard customers
- Strong free cash flow margin of 25.7% enables it to reinvest or return capital consistently, and its rising cash conversion increases its margin of safety
At $163.61 per share, Reddit trades at 22.9x forward EV/EBITDA. Is now the time to initiate a position? Find out in our full research report, it’s free.
Diamondback Energy (FANG)
Five-Year Return: +143%
Sporting one of Wall Street's most memorable ticker symbols, Diamondback Energy (NASDAQ: FANG) drills for and produces oil and natural gas from underground rock formations in the Permian Basin of West Texas and New Mexico.
Why Will FANG Beat the Market?
- Impressive 42.1% annual revenue growth over the last ten years indicates it’s winning market share this cycle
- Attractive asset base leads to wonderful unit economics and a best-in-class gross margin of 81%
- FANG is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
Diamondback Energy is trading at $180.44 per share, or 10.7x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don't just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn't over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
