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A track record of success: The 5 stocks that have crushed it year after year

Performing well over the course of a couple months, or in a particular market environment, is one thing. But the true test of a stock market star is whether a consistent track record of exceptional returns can be maintained over the course of several years.

Within the S&P 500, five stocks pass that test with flying colors.

Out of all the stocks currently within the index, just five have risen by more than 20 percent in 2015, in 2016 and in 2017 year to date.

Ticker
Company
2017 YTD perf.
2016 perf.
2015 perf.
AOS A. O. Smith 29.3% 23.6% 35.8%
AVGO Broadcom 39.5% 21.8% 44.3%
DXC DXC Technology 54.0% 81.8% 23.0%
NOC Northrop Grumman 27.2% 23.2% 28.1%
NVDA NVIDIA 85.4% 223.8% 64.4%

Not all are exactly household names.

The incredible surge enjoyed by Nvidia has been well-chronicled, but more mild-mannered fellow semiconductor stock Broadcom has managed to fly a bit more under the radar.

Northrop Grumman, the defense giant, has managed impressive earnings growth, and has recently benefited from a political push to increase U.S. military spending.

If DXC Technology sounds unfamiliar, that's because the IT services company was technically created in April 2017 when Computer Sciences Corp. (or CSC) merged with the enterprise services business of Hewlett Packard Enterprise. Since it springs from Computer Sciences, most of the performance reflected above came under that earlier name and ticker symbol.

A. O. Smith, the smallest company on the list, makes water heaters and boilers. Yet analysts are lukewarm on the shares; the most common rating is hold, according to FactSet data, with many raising flags about the company's swiftly surging valuation.

Boris Schlossberg, a strategist at BK Asset Management, says investors should take a "don't sell it unless it breaks" attitude toward all five of these stocks.

"The natural investment instinct is to say, 'Oh, there's going to be reversion to the mean, these stocks are going to come in,'" Schlossberg said Monday on CNBC's "Trading Nation." "But all of the momentum behind them still remains relatively positive, and their underlying businesses stay quite positive."

Ari Wald, head of technical analysis at Oppenheimer, has a similar perspective.

"All five are a great example of the persistence of market leadership, which is the backbone to momentum-based investing," Wald said Monday on "Trading Nation." "So as long as these stocks all screen favorably in our momentum work, and for the most part they do — they still have bullish trends, they've been leadership — we think they're still worth a position in your portfolio."

Within the quintet, Wald favors Broadcom.

Broadcom "hasn't made any upside progress since June," which could make it attractive on a "tactical" basis, Wald said.

"We think it's likely to get the breakout to the upside, given the positive momentum," the technical analyst added.

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Brian Sullivan

Brian Sullivan is co-anchor of CNBC's "Power Lunch" (M-F,1PM-3PM ET), one of the network's longest running programs, as well as the host of the daily investing program "Trading Nation." He is also a frequent guest on MSNBC's "Morning Joe" and other NBC properties.

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