3 Market-Beating Stocks to Target This Week

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.

It’s clear there’s a strong connection between sustained earnings growth and hall-of-fame returns. Keeping that in mind, here are three market-beating stocks that deserve a spot on your list.

Thermon (THR)

Five-Year Return: +130%

Creating the first packaged tracing systems, Thermon (NYSE:THR) is a leading provider of engineered industrial process heating solutions for process industries.

Why Are We Positive On THR?

1. Market share has increased this cycle as its 12.4% annual revenue growth over the last five years was exceptional
2. Operating margin expanded by 8.8 percentage points over the last five years as it scaled and became more efficient
3. Performance over the past five years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 46.1% outpaced its revenue gains

Thermon’s stock price of $50.76 implies a valuation ratio of 23.2x forward P/E. Is now a good time to buy?

Distribution Solutions (DSGR)

Return Since IPO: +63.4%

Founded in 1952, Distribution Solutions (NASDAQ:DSGR) provides supply chain solutions and distributes industrial, safety, and maintenance products to various industries.

Why Are We Fans of DSGR?

1. Market share has increased this cycle as its 15.1% annual revenue growth over the last two years was exceptional
2. Solid gross margin and unit economics free up capital for marketing and product development efforts
3. Earnings per share grew by 34.8% annually over the last two years and trumped its peers

At $30.57 per share, Distribution Solutions trades at 18.7x forward P/E. Is now the right time to buy?

Federated Hermes (FHI)

Five-Year Return: +101%

With roots dating back to 1955 and a pioneering role in money market funds, Federated Hermes (NYSE:FHI) is an investment management firm that offers a wide range of funds and strategies for institutional and individual investors.

Why Could FHI Be a Winner?

1. Performance over the past two years was boosted by share buybacks, which enabled its earnings per share to grow faster than its revenue
2. ROE punches in at 25.3%, illustrating management’s expertise in identifying profitable investments

Federated Hermes is trading at $55.38 per share, or 10.7x forward P/E. Is now the time to initiate a position?

Stocks We Like Even More

If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.

Don’t wait for the next volatility shock. Check out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.