3 Surprising Stocks That Have Outperformed Big Names in the Last 10 Years

While tech giants like Apple Inc. (AAPL) and Nvidia (NVDA) often grab the daily headlines, three companies have been quietly churning out significant returns in unglamorous but essential industries. Three such companies—IES Holdings Inc. (IESC), Builders FirstSource Inc. (BLDR), and Comfort Systems USA Inc. (FIX)—prove that some of the best investment stories come from companies most people have never considered. Each has had a 10-year average growth rate of over 40%, surpassing Nvidia, which has a growth rate of 36%.

Key Takeaways

• Lesser-known stocks can outperform popular companies by focusing on specific market niches and executing well within them.
• Strong management and clear business strategies are more important indicators of potential success than how often a company makes headlines.
• IES Holdings Inc. (IESC), Builders FirstSource Inc. (BLDR), and Comfort Systems USA Inc. (FIX) are three companies that have outperformed big names over the last 10 years.

IES Holdings

IES Holdings has transformed from an electrical contractor into a powerhouse of industrial services. Its strategic expansion helped IES grow from a struggling business in the mid-2000s to a company now generating $768 million in quarterly revenue.

What made IES a standout? Instead of putting all its eggs in one basket, it spread out into four key areas: communications, housing, industrial services, and infrastructure. This diversity means when one sector slows down, another often picks up the slack. The result? A stunning 31% revenue jump in recent quarters year over year.

Understanding market outperformance isn’t just about numbers—it’s about recognizing when companies are positioned ahead of major trends.

Builders FirstSource

Builders FirstSource became America’s largest building materials supplier by thinking big while selling the basics. In the last 20 years, they’ve expanded from being a regional player to having 570 locations across 43 states. When you see a new house going up, there’s a good chance Builders FirstSource supplied some of the materials.

Their winning strategy? Buy out competitors, embrace new technology, and focus on what builders need most. Even during recent housing market challenges, their stock climbed to $178, showing how strong their business model has become. They’ve grown from a simple supplier into a tech-savvy giant whose market cap has grown tenfold in five years.

The “Magnificent Seven” stocks—companies like NVIDIA, Microsoft Corporation (MSFT), and Meta Platforms Inc. (META)—are as well known as they are successful. “Buying low and selling high” is about finding stocks whose growth prospects, fundamentals, and market share aren’t so well known and thus aren’t priced in by the market yet.

Comfort Systems USA

Comfort Systems USA’s impressive growth is evident in its recent financial performance. In the third quarter of 2024, the company reported a 31% increase in revenue, reaching $1.81 billion, and a 40% rise in earnings per share to $4.09, compared with the same period in 2023. This financial success has been reflected in their stock performance, with shares reaching an all-time high of $462. How did they do it? Focusing on making buildings more energy-efficient is a growing priority for businesses and property owners alike.

Why These Companies Succeeded

These market champions share three key traits:

1. They found and dominated specific niches instead of trying to be everything to everyone.
2. They grew steadily by buying other companies and leveraging their size.
3. They adapted to changes like the push for energy efficiency and digital technology.

The Bottom Line

While flashy tech stocks make headlines, these three companies show how focusing on essential services and steady growth can create market champions. Their success proves that sometimes the best investments are in companies doing unglamorous but necessary work—and doing it extremely well.

Want to spot similar winners? Look for companies that do the following:

• Lead their market niches
• Show consistent financial growth
• Adapt to industry changes
• Focus on essential services everyone needs