Quality compounders are flywheels. Said differently, they’re businesses that generate heaps of profits and consistently reinvest them to produce even more profits. Rinse and repeat.
Companies with these characteristics are our definition of a "blue-chip". That said, here are three quality compounders that deserve a spot on your list.
Coupang (CPNG)
Market Cap: $51.44 billion
Founded in 2010 by Harvard Business School student Bom Kim, Coupang (NYSE: CPNG) is an e-commerce giant often referred to as the "Amazon of South Korea".
Why Does CPNG Stand Out?
- Active Customers are rising, meaning the company can increase revenue without incurring additional customer acquisition costs if it can cross-sell additional products and features
- Performance over the past three years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 35.4% outpaced its revenue gains
- Free cash flow margin jumped by 9.1 percentage points over the last few years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
Coupang’s stock price of $25.62 implies a valuation ratio of 26.2x forward EV/EBITDA. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
Insulet (PODD)
Market Cap: $23.02 billion
Revolutionizing diabetes care with its tubeless "Pod" technology, Insulet (NASDAQ: PODD) develops and manufactures innovative insulin delivery systems for people with diabetes, primarily through its Omnipod product line.
Why Do We Love PODD?
- Steady constant currency growth over the past two years shows the company can pursue its global ambitions, even in uncertain economic times
- Free cash flow margin grew by 32.6 percentage points over the last five years, giving the company more chips to play with
- Rising returns on capital show management is finding more attractive investment opportunities
At $320 per share, Insulet trades at 56.9x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free for active Edge members.
Amphenol (APH)
Market Cap: $172.5 billion
With over 90 years of connecting the world's technologies, Amphenol (NYSE: APH) designs and manufactures connectors, cables, sensors, and interconnect systems that enable electrical and electronic connections across virtually every industry.
Why Will APH Outperform?
- Annual revenue growth of 29.7% over the last two years was superb and indicates its market share increased during this cycle
- Additional sales over the last two years increased its profitability as the 40.2% annual growth in its earnings per share outpaced its revenue
- Strong free cash flow margin of 15% enables it to reinvest or return capital consistently, and its growing cash flow gives it even more resources to deploy
Amphenol is trading at $139.95 per share, or 37x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 6 Stocks for this week. 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 Kadant (+351% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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