25 Stocks That Could Jump 100x According To This 40-Year Study

If you haven’t read Thomas W. Phelps‘s”100 to 1 in the Stock Market,” you owe it to yourself to pick it up. I’ve read hundreds of investing books across my career, but this one stands near the top of the pile.

It’s not a gimmick, not a get-rich-quick tract, but a timeless manual on how great fortunes are actually built in the stock market: by buying exceptional companies early, holding on with discipline, and letting compounding do the work.

Born in 1902, Phelps was not some ivory tower theorist. He came of age during the Roaring Twenties and began his career as a financial journalist with The Wall Street Journal and Barron’s before becoming a security analyst, portfolio manager, and ultimately an investment counselor.

He lived through the crash of 1929, the Great Depression, multiple recessions, bull and bear markets alike. By the time he published his book in 1972, he had seen enough cycles to separate fads from enduring truths. His conclusion was stunning: between 1932 and 1971, more than 350 stocks had returned 100 times or more for patient holders. In every single year of that span, at least one company achieved 100-to-1 status.

I can’t recommend this book strongly enough. It’s as close to a field guide for compounding as you will find. But if you can’t, let me summarize it for you.

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Now, Phelps doesn’t sell hot tips or trading tricks. He shows you how to find the small, profitable, underappreciated businesses that reinvent industries, then he hammers home the most challenging part—doing nothing. Let the winners run. Pay attention to moats, reinvestment rates, and time. That’s it. Read it, reread it, mark it up, keep it on your desk. It is one of those rare investing books that can truly change the way you think about markets.

Phelps’s Framework In Plain English

Phelps’s core idea was stark and liberating. Own exceptional enterprises early, let time and product-market fit do the heavy lifting, and do not interrupt compounding without a very good reason. He cataloged hundreds of historical 100-baggers across four decades and found the same patterns over and over. Small to mid-size companies with real moats. Products or processes that made something cheaper, faster, safer, or simply possible for the first time. Managements that reinvested at high returns and investors willing to sit still long enough to let the math work.

The framework is simple. First, look for durable advantage. That can be network effects, proprietary know-how, local monopoly dynamics, switching costs, or advantageous cost structures. Second, verify the runway. The addressable market has to be large enough to allow a great operator compound for many years without hitting a wall. Third, insist on present-tense profitability. Phelps loved time, but he did not love science projects. Cash economics keep you honest. Fourth, buy when the narrative is still forming. A modest valuation with a long runway is better than a “perfect story” priced for perfection. Last, do less. The tax deferral and error-reduction from holding winners is part of the edge.

Today’s 25 Phelps Candidates

Using that lens, here are twenty-five profitable companies across sectors that, in my view, best fit the spirit of Phelps’s criteria right now. I grouped them by how they create advantage, not by index label. The point is to show the compounding engines, not to celebrate categories.

Start with the builders of the new compute and power footprint. EMCOR Group EME, Sterling Infrastructure STRL, Argan AGX and Dycom DY live where rubber meets road for data centers, grid upgrades, and communications build-outs. They are execution machines with contracting models that can scale through cycles, and they convert backlog to cash. Quanta Services PWR is larger but still relevant to the thesis. It has the balance sheet, the craft labor depth, and the customer relationships to be a long-duration beneficiary of transmission, distribution, and industrial electrification. All five make essential things happen on time and on budget, and that is a moat in a world short on skilled trades and long on demand.

Move up the stack to precision manufacturers that quietly own their niches. Celestica CLS and Fabrinet FN sit at the intersection of optics, networking, and advanced manufacturing for AI and cloud. Both run asset-light, engineering-heavy models that generate high returns on capital when throughput rises. They are not household names, which is the point. Profit today, capacity to reinvest, and customers who will need more, not less, of what they do.

In pure network infrastructure, Arista Networks ANET is the category killer in high-speed switching for cloud and AI clusters. It is much bigger than the typical “microcap that becomes a monster,” but great compounding machines do not ask our permission. On the server side, Super Micro Computer SMCI has become the fastest-moving platform supplier in AI hardware. It is not a secret anymore, but the combination of velocity, modular design, and tight customer feedback loops can keep returns elevated longer than skeptics think.

Materials with pricing power are classic Phelps ground. Martin Marietta MaterialsMLM is a local-monopoly aggregates business with growing demand from highways, data center pads, and on-shoring industrial sites. When you control the rock near the job site, you control the margin. Breedon Group BRDNF is a UK-anchored materials roll-up with disciplined capital allocation and attractive regional positions. Both convert volume and price into cash reliably and have acquisition math that can compound for years.

Engineering scale matters, too. WSP Global WSPOF brings technical bench strength to infrastructure, environment, and building systems worldwide. The moat is expertise at scale plus customer intimacy across regulated and mission-critical end markets. These models can outrun GDP for a long time because the knowledge gets reused and priced correctly.

On the consumer side, the two factors to favor are velocity and format advantage. e.l.f. Beauty ELF is the best example of an insurgent brand compounding market share with digital feedback loops, fast innovation cycles, and disciplined pricing. Academy Sports ASO pairs strong private-label penetration with tight inventory control and expanding omnichannel. Boot Barn BOOT owns a niche with loyal customers, hard-to-replicate merchandising, and store economics that travel. Sprouts Farmers Market SFM has quietly rebuilt its box economics around produce first, wellness adjacency, and disciplined new-unit growth. All four produce real earnings, reinvest at high returns, and still have long unit growth runways.

Cash-rich, counter-cyclical specialty finance can also turn into compounding machines. FirstCash FCFS is a pawn and small-dollar retail finance operator with a durable moat in underwriting and store operations. The business is not fashionable, which is fine by us; it throws off cash, funds growth internally, and benefits when mainstream credit tightens. In software, Agilysys AGYS has become a sticky vertical platform in hospitality with high recurring revenue, improving margins, and a long upgrade cycle ahead. It is a perfect example of boring software getting less boring as operating leverage shows up in GAAP results.

Internationally, two utilities and a fintech meet the test. Sabesp SBS is a Brazilian water utility with improved governance, rising free cash flow, and a multi-year capex plan that can translate into earnings and dividend growth. StoneCo STNE rebuilt its underwriting and now converts volume into profit with discipline, not sizzle. Both have moved through their “prove it” phases. Back in North America, WillScot Mobile Mini WSC runs a rental model with pricing power, value-added services, and high incremental margins. It is an underappreciated royalty on construction, energy, and events activities. Badger Meter BMI is a quiet champion in smart metering and water tech with sticky municipal customers and expanding software and services mix. James Hardie Industries JHX monetizes a long runway in premium building products with a brand, channel, and recycling moat that has legs.

Round out the list with two UK quality compounders that rarely look cheap but often remain cheap in hindsight. Spectris SEPJF and Halma HLMAF are serial acquirers and operators of test, measurement, safety, and health technologies. The advantage is a culture that consistently buys right, integrates well, and improves the units they own. These are not moonshots. They are relentless, and relentless tends to win.

That is twenty-five. Every name is profitable today. Every name has a credible path to keep reinvesting at high returns. Every name is early enough in its runway that the next decade matters more than the last quarter. None of them requires a story stock multiple to work. If they execute and you stay out of the way, the arithmetic of compounding does what it always does.

Closing Thoughts

A final word in Phelps’s spirit. The search is not for forecasts; it is for engines. When you find a real engine, size it so you can sit through volatility. Let management do the daily worrying. Your job is to own scarce assets with long runways and let time pull forward the value. That is how 100-to-1 actually happens in the real world.

Editorial content from our expert contributors is intended to be information for the general public and not individualized investment advice. Editors/contributors are presenting their individual opinions and strategies, which are neither expressly nor impliedly approved or endorsed by Benzinga.

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