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. Taking that into account, here are three market-beating stocks that deserve a spot on your list.
MACOM (MTSI)
Five-Year Return: +283%
Founded in the 1950s as Microwave Associates, a communications supplier to the US Army Signal Corp, today MACOM Technology Solutions (NASDAQ: MTSI) is a provider of analog chips used in optical, wireless, and satellite networks.
Why Could MTSI Be a Winner?
- Market share has increased this cycle as its 15.8% annual revenue growth over the last two years was exceptional
- Estimated revenue growth of 18.3% for the next 12 months implies demand will accelerate from its two-year trend
- Earnings per share have massively outperformed its peers over the last five years, increasing by 41.3% annually
MACOM is trading at $149.10 per share, or 37.8x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
Preferred Bank (PFBC)
Five-Year Return: +147%
Founded in 1991 with a focus on serving the Pacific Rim community in Southern California, Preferred Bank (NASDAQ: PFBC) is a commercial bank that provides banking products and services to small and mid-sized businesses, entrepreneurs, real estate developers, and high net worth individuals.
Why Are We Positive On PFBC?
- Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Annual tangible book value per share growth of 13.2% over the last five years was superb and indicates its capital strength increased during this cycle
- Market-beating return on equity illustrates that management has a knack for investing in profitable ventures
At $90.25 per share, Preferred Bank trades at 1.4x forward P/B. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free for active Edge members .
East West Bank (EWBC)
Five-Year Return: +162%
As the largest independent bank in the U.S. focused on bridging financial services between America and Asia, East West Bancorp (NASDAQ: EWBC) operates a commercial bank that provides personal and business banking services with a unique focus on facilitating U.S.-Asia cross-border transactions.
Why Are We Backing EWBC?
- Impressive 12.4% annual net interest income growth over the last five years indicates it’s winning market share this cycle
- Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Impressive 12.4% annual tangible book value per share growth over the last five years indicates it’s building equity value this cycle
East West Bank’s stock price of $101.60 implies a valuation ratio of 1.6x forward P/B. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
Fresh US-China trade tensions just tanked stocks—but strong bank earnings are fueling a sharp rebound. Don’t miss the bounce.
Don’t let fear keep you from great opportunities and take a look at Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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