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The goal of rational investors is to maximize total return under a given set of constraints.

Most investors are seeking outperformance when buying stocks. One of the most popular measures of investment outperformance is alpha.

Put simply, alpha is a financial metric that compares the performance of a given investment, with a suitable index for that investment.

We created a list of 100 high alpha stocks that have outperformed the S&P 500 Index.

This article will explain alpha in greater detail, illustrate the concept with an example, and list the top 10 high alpha stocks in the Sure Analysis Research Database right now.

What Is Alpha?

As previously mentioned, Alpha compares the performance of a given investment, with a suitable index for that investment.

In most cases, the index utilized for comparison is the S&P 500 Index, arguably the most well-known stock market index in the world.

If a stock has an alpha value of 1.0, it means the security in question outperformed the chosen index by 1% over whatever time frame is used for comparison.

By contrast, a negative alpha means the stock underperformed the index.

For example, an alpha of -1 means the stock underperformed the index by 1% per year over the specified time period.

Alpha is one of several performance measures that are commonly used to evaluate an investment security or portfolio. Another common performance measure is Beta, which measures a stock’s volatility compared with an index.

Alpha and beta are both used to calculate the capital asset pricing model, otherwise known as CAPM, which calculates the required return of an investment to compensate for the level of risk involved.

Expected returns are also important for valuation analysis. The formula for expected total return of a stock is below:

Expected total return = change in earnings-per-share x change in the price-to-earnings ratio

With this, investors can calculate alpha as follows:

The variables are defined as:

• R = Portfolio return
• Rf = Risk-free rate
• βi = Beta of the investment
• Rm = Expected return of market

Additionally, subtracting the risk free rate from the expected return of the market is also known as the market risk premium.

Our analysis uses a 4.3% risk free rate (current 10-year Treasury rate) and a 5.5% market risk premium.

To illustrate, assume a portfolio generated a total return of 20% in a given time period, with a Beta value of 1.1. In this scenario, alpha would be calculated as follows:

• Alpha = (0.20-0.043) – 1.1(0.055)
  =.0965 or 9.65%

Therefore, the alpha in this example would be 9.65%.

The Top 10 High Alpha Stocks

The following 10 stocks have the highest alpha in the Sure Analysis Research Database. Stocks are listed by alpha value, from lowest to highest.

High Alpha Stock #10: Autoliv Inc. (ALV)

• Alpha: 15.1%

Autoliv is a global manufacturer of airbags, seatbelts, and steering wheels for automobile manufacturers all over the globe. The company is the industry leader in a critical and growing segment of the automobile manufacturing process.

Autoliv posted fourth quarter and full-year earnings on January 31st, 2025, and results were mixed. The company saw adjusted earnings-per-share of $3.05, which was 16 cents per share ahead of expectations. Revenue was off 5% year-over-year to $2.62 billion, missing estimates by $90 million.

The company noted a record high for operating profit, operating margin, and earnings despite the fact that sales declined 5% year-over-year due to currency translation and sales mix.

Adjusted operating margin was 13.4% of revenue, which was aided by strict cost controls and labor productivity gains. Headcount declined 9% year-over-year on fewer direct production personnel. Gross margin was 21% of revenue, up 180 basis points year-over-year.

The company has $480 million remaining on its share repurchase program heading into 2025. In Q4, $102 million was spent on repurchases.

Click here to download our most recent Sure Analysis report on ALV (preview of page 1 of 3 shown below):

High Alpha Stock #9: Carters Inc. (CRI)

• Alpha: 15.3%

Carter’s, Inc. is the largest branded retailer of apparel exclusively for babies and young children in North America. It was founded in 1865 by William Carter. The company owns the Carter’s and OshKosh B’gosh brands, two of the most known brands in the children’s apparel space.

Carter’s acquired competitor OshKosh B’gosh for $312 million in 2005. Now, these brands are sold in leading department stores, national chains, and specialty retailers domestically and internationally.

On October 26th, 2024, the company reported third-quarter results for Fiscal Year (FY)2024. The company reported a decline in third-quarter fiscal 2024 results, with net sales down 4.2% to $758 million compared to the previous year’s $792 million.

Source: Investor Presentation

The company’s operating margin decreased to 10.2% from 11.8%, attributed to higher investments in pricing and marketing, despite a lower cost of goods.

Earnings per diluted share (EPS) dropped to $1.62 from $1.78, reflecting softer demand in key segments.

Click here to download our most recent Sure Analysis report on CRI (preview of page 1 of 3 shown below):

High Alpha Stock #8: Virtus Investment Partners Inc. (VRTS)

• Alpha: 15.4%

Virtus Investment Partners, Inc. is a distinctive partnership of boutique investment managers, singularly committed to the long-term success of individual and institutional investors.

The firm offers a diverse range of investment strategies across asset classes, including equity, fixed income, multi-asset, as well as alternative investments.

These strategies are available in multiple product forms, such as open-end mutual funds, closed-end funds, ETFs, retail separate accounts, and institutional accounts.

Virtus operates through a multi-manager model, partnering with affiliated managers and select unaffiliated sub-advisers, each maintaining distinct investment philosophies and processes.

This structure allows Virtus to offer clients access to specialized expertise and a broad array of solutions tailored to meet various financial objectives.

On January 31st, 2025, Virtus reported its Q4 and full-year results for the period ending December 31st, 2024. Total AUM fell by 5% sequentially to $175.0 billion due to net outflows in institutional accounts and U.S. retail funds, and negative market performance, partially offset by inflows in ETFs, global funds, and retail separate accounts.

Net outflows of ($4.8) billion worsened from ($1.7) billion in Q3, primarily due to a $3.3 billion lower-fee partial redemption of an institutional mandate.

However, adjusted EPS rose 8% to $7.50, driven by higher investment management fees and a soft increase in operating expenses. For FY2025, we expect adjusted EPS of $26.81.

Click here to download our most recent Sure Analysis report on VRTS (preview of page 1 of 3 shown below):

High Alpha Stock #7: Shoe Carnival Inc. (SCVL)

• Alpha: 15.5%

Shoe Carnival, Inc. is a leading U.S.-based retailer specializing in family footwear and accessories. The company operates a large network of stores, offering a wide variety of athletic, casual, and dress shoes for men, women, and children.

With over 400 stores across the U.S. under the Shoe Carnival, Shoe Station, and Rogan’s Shoes brands, the company has steadily expanded its market presence.

In addition to its brick-and mortar locations, Shoe Carnival has a growing e-commerce platform, supporting its omnichannel strategy.

On November 21st, 2024, Shoe Carnival reported third quarter Fiscal 2024 results. The company reported GAAP EPS of $0.70 and Adjusted EPS of $0.71, meeting expectations.

While third-quarter net sales fell to $306.9 million from $319.9 million in 2023 due to a retail calendar shift, adjusted figures showed a 2.2% year-over-year increase.

Year-to-date, net sales rose 4.9%, with strong Back-to-School sales and contributions from the Rogan’s Shoes acquisition driving performance.

Click here to download our most recent Sure Analysis report on SCVL (preview of page 1 of 3 shown below):

High Alpha Stock #6: Hyster Yale Inc. (HY)

• Alpha: 16.5%

Hyster-Yale Materials Handling operates in the materials handling industry. The company designs, manufactures, and sells a comprehensive range of lift trucks and aftermarket parts, serving diverse customers across various sectors, including manufacturing, warehousing, and logistics.

HY maintains a strong competitive position with a significant market share due to its reputable brands, Hyster and Yale. The company segments its revenue primarily into three categories: new equipment sales, parts sales, and service revenues. In 2023, HY reported robust financials, demonstrating consistent growth and a diversified revenue stream.

On November 5th, 2024, the company announced results for the third quarter of 2024. The company reported Q3 non GAAP EPS of $0.97, missing estimates by $1.00 and produced revenue of $1.02 billion, which was up 2.0% year-over year.

The company generated $70 million in operating cash flow but faced a 44% decline in operating profit, reaching $33.1 million, as ongoing cost pressures and lower volumes in EMEA and JAPIC weighed on margins. Net income dropped to $17.2 million from $35.8 million in Q3 2023, while diluted EPS fell 53% to $0.97.

Click here to download our most recent Sure Analysis report on HY (preview of page 1 of 3 shown below):

High Alpha Stock #5: ASML Holding NV (ASML)

• Alpha: 17.0%

ASML Holding is one of the largest manufacturers of chip-making equipment in the world. The company’s customers include a wide variety of industries, and ASML is present in 16 countries with about 31,000 employees.

ASML has a current market capitalization of ~$275 billion and produces more than $30 billion in annual revenue.

ASML posted fourth quarter and full-year results on January 29th, 2025, and results were strong once again. The company noted revenue was 28% higher year-on-year to $9.6 billion, and beat estimates by more than $200 million.

Earnings-per-share came to $7.10, which beat estimates by 12 cents. Quarterly net booking were $7.4 billion, of which $3.1 billion was EUV.

China accounted for total net system sales of 27%, while the US was still the largest segment at 28%. It is unclear as of yet how export controls may play a part in this going forward.

For this year, guidance was initiated with a very wide range of ~$31 billion to ~$36 billion in sales, with gross margins expected to be 51% to 53% of revenue. Q1 gross margins are expected to be 52% to 53%, implying the possibility of deterioration for the remaining three quarters.

Click here to download our most recent Sure Analysis report on ASML (preview of page 1 of 3 shown below):

High Alpha Stock #4: Alphabet Inc. (GOOG)(GOOGL)

• Alpha: 18.1%

Alphabet is a technology conglomerate that operates several businesses such as Google search, Android, Chrome, YouTube, Nest, Gmail, Maps, and many more. Alphabet is a leader in many of the areas of technology that it operates.

On February 4th, 2025, Alphabet announced fourth quarter and full year results for the period ending December 31st, 2024. For the quarter, revenue grew 11.8% to $96.5 billion, but this was $170 million less than expected.

Adjusted earnings-per-share of $2.15 compared very favorably to $1.64 in the prior year and was $0.02 above estimates. For the year, revenue grew 14% to $350 billion while adjusted earnings-per-share of $8.04 compared to $5.80 in 2023.

Most businesses performed well during the period. For the quarter, revenue for Google Search, the largest contributor to results, grew 12.5% to $54 billion. YouTube ads increased 13.8% to $10.5 billion while Google Network declined 4.1% to just under $8 billion.

Click here to download our most recent Sure Analysis report on GOOGL (preview of page 1 of 3 shown below):

High Alpha Stock #3: Shutterstock, Inc. (SSTK)

• Alpha: 18.9%

Shutterstock sells high-quality creative content for brands, digital media and marketing companies through its global creative platform.

Its platform hosts the most extensive and diverse collection of high-quality 3D models, videos, music, photographs, vectors and illustrations for licensing. The company reported $935 million in revenues last year.

On January 7th, 2025, Shutterstock announced it entered a merger agreement with Getty Images through a merger of equals. The combined company will retain the name Getty Images Holdings, Inc and trade on the NYSE under ticker GETY.

Getty Images shareholders will own roughly 54.6% of the entity and Shutterstock shareholders will own the remaining 45.3%. Shareholders of SSTK will receive $28.84870 of cash, or 9.17 shares of Getty Images plus $9.50 in cash per share.

The combined company would have revenue between $1,979 million and $1,993 million, 46% of it being subscription revenue. About $175 million of annual cost savings is forecast by the third year, with most of this expected after 1 to 2 years.

On January 27th, 2025, Shutterstock announced a $0.33 quarterly dividend, a 10% increase over the prior year.

On February 25th, 2025, Shutterstock published its fourth quarter results for the period ending December 31, 2024. While quarterly revenue grew by a solid 15% year-on-year, it missed analyst estimates by nearly $4 million.

Adjusted EPS of $0.67 decreased by 7%, and also missed analyst estimates by $0.18.

Click here to download our most recent Sure Analysis report on SSTK (preview of page 1 of 3 shown below):

High Alpha Stock #2: AES Corp. (AES)

• Alpha: 19.8%

The AES (Applied Energy Services) Corporation was founded in 1981 as an energy consulting company. The corporation now has businesses in 14 countries and a portfolio of approximately 160 generation facilities.

AES produces power through various fuel types, such as gas, renewables, coal, and oil/diesel. The company has more than 36,000 Gross MW in operation. In 2024, AES produced $12.3 billion in revenues.

AES Corporation reported fourth quarter results on February 28th, 2025, for the period ending December 31, 2024. Adjusted EPS decreased 26% to $0.54 for Q4 2024, but this still beat analyst estimates by $0.19.

For the full year, AES’ adjusted EPS rose 22% to $2.14 from $1.76 in 2023. The company constructed and acquired 3 GW of renewable energy in 2024, as well as constructed a 670 MW combined cycle gas plant in Panama.

Leadership initiated its 2025 guidance, expecting adjusted EPS of $2.10 to $2.26 for the full fiscal year. Additionally, the company reaffirms its expectation it can grow EPS on average 7% to 9% through 2025 from a base year of 2020. It also expects annual EPS growth of 7% to 9% from 2023 through 2027.

Click here to download our most recent Sure Analysis report on AES (preview of page 1 of 3 shown below):

High Alpha Stock #1: Eli Lilly & Co. (LLY)

• Alpha: 20.2%

Eli Lilly develops, manufactures, and sells pharmaceuticals around the world, and has about 43,000 employees globally. Eli Lilly has annual revenue of $59 billion.

On December 9th, 2024, Eli Lilly raised its quarterly dividend 15.4% to $1.50, extending the company’s dividend growth streak to 11 years.

On February 6th, 2025, Eli Lilly announced fourth quarter and full year results for the period ending December 31st, 2024. For the quarter, revenue surged 44.7%% to $13.5 billion, which beat estimates by $100 million.

Source: Investor Presentation

Adjusted earnings-per-share of $5.32 compared very favorably to adjusted earnings-per-share of $2.49 in the prior year and was $0.24 ahead of expectations.

For the year, revenue grew 32% $45 billion while adjusted earnings-per-share of $12.99 compared to $6.32 in 2023. Volumes company-wide were up 48% for the quarter, but pricing was down 4%.

U.S. revenue grew 40% to $9.03 billion, as volume was up 45% while pricing fell 5%. International revenues were up 55% to $4.5 billion as volumes improved 56%.

Revenue for Mounjaro, which helps patients with weight management and is the company’s top gross product, totaled $3.53 billion, compared to $2.21 billion a year ago.

Demand remains incredibly high for the product. Zepbound, which is also used to treat patients with obesity, had revenue of $1.91 billion for the quarter and $4.9 billion for the year.

Click here to download our most recent Sure Analysis report on LLY (preview of page 1 of 3 shown below):

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