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.
Even if a company is profitable, it doesn’t always mean it’s a great investment.
Some struggle to maintain growth, face looming threats, or fail to reinvest wisely, limiting their future potential.
Unprofitable companies can burn through cash quickly, leaving investors exposed if they fail to turn things around.
Without a clear path to profitability, these businesses risk running out of capital or relying on dilutive fundraising.
Many investors pay attention to mid-cap stocks because they have established business models and expansive market opportunities.
However, their paths to becoming $100 billion corporations are ripe with competition, ranging from giants with vast resources to agile upstarts eager to disrupt the status quo.
Investors looking for hidden gems should keep an eye on small-cap stocks because they’re frequently overlooked by Wall Street.
Many opportunities exist in this part of the market, but it is also a high-risk, high-reward environment due to the lack of reliable analyst price targets.
The stocks in this article are all trading near their 52-week highs.
This strength often reflects positive developments such as new product launches, favorable industry trends, or improved financial performance.
A highly volatile stock can deliver big gains - or just as easily wipe out a portfolio if things go south.
While some investors embrace risk, mistakes can be costly for those who aren’t prepared.
A surplus of cash can mean financial stability, but it can also indicate a reluctance (or inability) to invest in growth.
Some of these companies also face challenges like stagnating revenue, declining market share, or limited scalability.
Generating cash is essential for any business, but not all cash-rich companies are great investments.
Some produce plenty of cash but fail to allocate it effectively, leading to missed opportunities.
A company that generates cash isn’t automatically a winner.
Some businesses stockpile cash but fail to reinvest wisely, limiting their ability to expand.
While profitability is essential, it doesn’t guarantee long-term success.
Some companies that rest on their margins will lose ground as competition intensifies - as Jeff Bezos said, "Your margin is my opportunity".
The S&P 500 (^GSPC) is home to the biggest and most well-known companies in the market, making it a go-to index for investors seeking stability.
But not all large-cap stocks are created equal - some are struggling with slowing growth, declining margins, or increased competition.
Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.
Just because a business is in the green today doesn’t mean it will thrive tomorrow.
Business services providers thrive by solving complex operational challenges for their clients, allowing them to focus on their secret sauce. But cutbacks in corporate spending and the threat of new AI products have kept sentiment in check,
and over the past six months, the industry’s 8.6% return has trailed the S&P 500 by 1.8 percentage points.
The $10-50 price range often includes mid-sized businesses with proven track records and plenty of growth runway ahead.
They also usually carry less risk than penny stocks, though they’re not immune to volatility as many lack the scale advantages of their larger peers.
Investors looking for hidden gems should keep an eye on small-cap stocks because they’re frequently overlooked by Wall Street.
Many opportunities exist in this part of the market, but it is also a high-risk, high-reward environment due to the lack of reliable analyst price targets.
The stocks in this article are all trading near their 52-week highs.
This strength often reflects positive developments such as new product launches, favorable industry trends, or improved financial performance.
Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.
Just because a business is in the green today doesn’t mean it will thrive tomorrow.
Small-cap stocks can be incredibly lucrative investments because their lack of analyst coverage leads to frequent mispricings.
However, these businesses (and their stock prices) often stay small because their subscale operations make it harder to expand their competitive moats.
The performance of consumer discretionary businesses is closely linked to economic cycles. Thankfully for the industry, all signs are pointing up as discretionary stocks have gained 12.3% over the past six months,
beating the S&P 500’s 10.4% return.
Many small-cap stocks have limited Wall Street coverage, giving savvy investors the chance to act before everyone else catches on.
But the flip side is that these businesses have increased downside risk because they lack the scale and staying power of their larger competitors.
Growth is a hallmark of all great companies, but the laws of gravity eventually take hold.
Those who rode the COVID boom and ensuing tech selloff in 2022 will surely remember that the market’s punishment can be swift and severe when trajectories fall.
While strong cash flow is a key indicator of stability, it doesn’t always translate to superior returns.
Some cash-heavy businesses struggle with inefficient spending, slowing demand, or weak competitive positioning.
Growth boosts valuation multiples, but it doesn’t always last forever.
Companies that cannot maintain it are often penalized with large declines in market value, a lesson ingrained in investors who lost money in tech stocks during 2022.
The Russell 2000 (^RUT) is home to many small-cap stocks, offering investors the chance to uncover hidden gems before the broader market catches on.
However, these companies often come with higher volatility and risk, as their smaller size makes them more vulnerable to economic downturns.
Small-cap stocks can be incredibly lucrative investments because their lack of analyst coverage leads to frequent mispricings.
However, these businesses (and their stock prices) often stay small because their subscale operations make it harder to expand their competitive moats.
Stocks in the $10-50 range offer a sweet spot between affordability and stability as they’re typically more established than penny stocks.
But their headline prices don’t guarantee quality, and investors should exercise caution as some have shaky business models.
The stocks featured in this article have all approached their 52-week highs.
When these price levels hit, it typically signals strong business execution, positive market sentiment, or significant industry tailwinds.
Stocks trading between $10 and $50 can be particularly interesting as they frequently represent businesses that have survived their early challenges.
However, investors should remain vigilant as some may still have unproven business models, leaving them vulnerable to the ebbs and flows of the broader market.
Most consumer discretionary businesses succeed or fail based on the broader economy. Lately, it seems like demand trends have worked in their favor as the industry has returned 12.3% over the past six months,
outpacing S&P 500 by 1.9 percentage points.
Consumer staples are considered safe havens in turbulent markets due to their inelastic demand profiles. On the other hand, they usually underperform during bull runs,
and this paradigm has rung true over the past six months as the sector’s -8.1% decline paled in comparison to the S&P 500’s 10.4% gain.
Small-cap stocks in the Russell 2000 (^RUT) can be a goldmine for investors looking beyond the usual large-cap names.
But with less stability and fewer resources than their bigger counterparts, these companies face steeper challenges in scaling their businesses.
The Russell 2000 (^RUT) is packed with potential breakout stocks, thanks to its focus on smaller companies with high growth potential.
However, smaller size also means these businesses often lack the resilience and financial flexibility of large-cap firms, making careful selection crucial.
The Russell 2000 (^RUT) is packed with potential breakout stocks, thanks to its focus on smaller companies with high growth potential.
However, smaller size also means these businesses often lack the resilience and financial flexibility of large-cap firms, making careful selection crucial.
Chubb trades at $306.81 and has moved in lockstep with the market. Its shares have returned 9.5% over the last six months while the S&P 500 has gained 10.4%.
The past six months have been a windfall for Biogen’s shareholders. The company’s stock price has jumped 41.7%, setting a new 52-week high of $188.65 per share. This was partly thanks to its solid quarterly results, and the performance may have investors wondering how to approach the situation.
Sterling currently trades at $306.08 and has been a dream stock for shareholders. It’s returned 1,266% since January 2021, blowing past the S&P 500’s 82% gain. The company has also beaten the index over the past six months as its stock price is up 26.8% thanks to its solid quarterly results.
Fortive has followed the market’s trajectory closely, rising in tandem with the S&P 500 over the past six months. The stock has climbed by 5.4% to $54.97 per share while the index has gained 10.4%.
L.B. Foster has had an impressive run over the past six months as its shares have beaten the S&P 500 by 8.9%. The stock now trades at $28.41, marking a 19.3% gain. This performance may have investors wondering how to approach the situation.
Since July 2025, Airbnb has been in a holding pattern, posting a small return of 0.7% while floating around $139.58. The stock also fell short of the S&P 500’s 10.4% gain during that period.
Over the past six months, Cohen & Steers’s shares (currently trading at $68.04) have posted a disappointing 11.7% loss, well below the S&P 500’s 10.4% gain. This might have investors contemplating their next move.
UnitedHealth has followed the market’s trajectory closely, rising in tandem with the S&P 500 over the past six months. The stock has climbed by 14.5% to $344.03 per share while the index has gained 10.4%.
What a time it’s been for IQVIA. In the past six months alone, the company’s stock price has increased by a massive 51.4%, reaching $242.50 per share. This performance may have investors wondering how to approach the situation.
Prosperity Bancshares has been treading water for the past six months, recording a small loss of 2.7% while holding steady at $72.51. The stock also fell short of the S&P 500’s 10.4% gain during that period.
Ingersoll Rand has been treading water for the past six months, recording a small loss of 2.4% while holding steady at $85.51. The stock also fell short of the S&P 500’s 10.4% gain during that period.
