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5 High-Quality Stocks Outperforming the S&P 500

Stocks to consider as market rebounds

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James Li
Oct 05, 2021

Summary

  • Dow rebounds from Monday’s market decline, yet major volatility risks remain.
  • GuruFocus’ High Quality Low CapEx model portfolio has outperformed the benchmark year to date.
  • Top-performing, high-quality stocks include Alphabet and Old Dominion Freight Line.
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In light of increasing market volatility, five stocks with high business quality and have outperformed the Standard & Poor’s 500 index in the year to date are Alphabet Inc. (

GOOGL, Financial)(GOOG, Financial), Old Dominion Freight Line (ODFL, Financial), West Pharmaceutical Services Inc. (WST, Financial), The Descartes Systems Group Inc. (DSGX, Financial) and LeMaitre Vascular Inc. (LMAT, Financial) according to the High Quality Low CapEx Screener, a Premium screen nested within GuruFocus’ All-in-One Screener.

Dow rebounds from Monday’s decline yet volatility risks remain

On Tuesday, the Dow Jones Industrial Average closed at 34,314.67, up 311.75 points from Monday’s close of 34,002.92 yet down 11.79 points from last Friday’s close of 34,326.46.

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The U.S. market indexes rebounded from Monday’s decline on the back of technology and energy stocks clawing back from Monday’s losses. Despite this, investors watched several major governmental deadlines, including an Oct. 18 deadline in which lawmakers must address the debt ceiling or risk default on the national debt according to the Treasury Department.

As such, investors may wish to consider looking at high-quality stocks that have outperformed the S&P 500 benchmark in the year to date. According to the Model Portfolios page, the High Quality Low CapEx model portfolio has returned 24.96% year to date, compared with the S&P 500 return of 16%. The Aggregated Statistics Chart shows that the stocks in the High Quality Low CapEx stocks as of Tuesday have a mean year-to-date return of 16.60% with a median of 14.16%.

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Alphabet

Class A shares of Alphabet (

GOOGL, Financial) traded around $2,733.61, outperforming the S&P 500 by approximately 36.75% year to date.

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GuruFocus ranks the Mountain View, California-based online search giant’s profitability 9 out of 10 on several positive investing signs, which include a five-star business predictability rank, a high Piotroski F-score of 7 and an operating margin that outperforms more than 85% of global competitors.

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Gurus with holdings in Alphabet include

Ken Fisher (Trades, Portfolio), PRIMECAP Management (Trades, Portfolio) and Pioneer Investments.

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Old Dominion Freight Line

Shares of Old Dominion Freight Line (

ODFL, Financial) traded around $290.20, outperforming the S&P 500 by approximately 29.72% year to date.

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GuruFocus ranks the Thomasville, North Carolina-based truckload carrier’s profitability 9 out of 10 on several positive investing signs, which include a high Piotroski F-score of 9, a 4.5-star business predictability rank and an operating margin that has increased approximately 6.70% per year on average over the past five years and outperforms more than 87% of global competitors.

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West Pharmaceutical Services

Shares of West Pharmaceutical Services (

WST, Financial) traded around $416.40, outperforming the S&P 500 by approximately 29.06% year to date.

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GuruFocus ranks the Exton, Pennsylvania-based medical supplier’s profitability 9 out of 10 on several positive investing signs, which include a high Piotroski F-score of 7, a four-star business predictability rank and an operating margin that has increased approximately 7.10% per year on average over the past five years and is outperforming more than 68% of global competitors.

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The Descartes Systems Group

Shares of The Descartes Systems Group (

DSGX, Financial) traded around $78.45, outperforming the S&P 500 by approximately 18.29% year to date.

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GuruFocus ranks the Canadian software company’s financial strength and profitability 8 out of 10 on several positive investing signs, which include a four-star business predictability rank, a strong Altman Z-score of 24, a high Piotroski F-score of 8 and an operating margin that has increased approximately 4.3% per year on average over the past five years.

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LeMaitre Vascular

Shares of LeMaitre Vascular (

LMAT, Financial) traded around $53.99, outperforming the S&P 500 benchmark by approximately 15.44% year to date.

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GuruFocus ranks the Burlington, Massachusetts-based medical device company’s profitability 9 out of 10 on several positive investing signs, which include a 4.5-star business predictability rank and an operating margin that has increased approximately 6% per year on average over the past five years.

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Disclosures

I am/we are Long ODFL
The views of this author are solely their own opinion and are not endorsed or guaranteed by GuruFocus.com
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