Legendary investor Peter Lynch built his reputation on finding "ten-baggers," stocks that rise tenfold, and his favorite hunting ground was not a spreadsheet. It was everyday life.
Lynch urged investors to notice the products and brands people love before Wall Street catches on. Through that lens, one consumer name keeps catching my eye: On Holding (ONON -2.32%), the Swiss maker of the cushioned running shoes that suddenly seem to be on everyone's feet.
Lynch's most famous principle was to buy what you know. If you keep noticing a product in the real world, that observation can be an edge over analysts staring at models. On fits this perfectly. Its shoes, with their distinctive hollow-soled design, have gone from a niche runner's favorite to a genuine cultural staple in just a few years.
If it feels like more people around you are wearing On lately, that is not your imagination, and it is exactly the kind of grassroots signal Lynch loved to act on.
Image source: Getty Images.
A fast grower with a long runway
Lynch's ideal ten-bagger was a fast grower with plenty of room left to run, and On qualifies. Sales are climbing more than 23% a year, and the growth is broad. Its business in Asia is exploding, up more than 60% in a recent quarter with standout momentum in China and South Korea, a region that already accounts for a fifth of sales and has enormous headroom. On's apparel line, still young, is growing even faster than its shoes and offers newcomers a fresh entry point to the brand. And its direct-to-consumer channel keeps deepening margins. That is several growth engines firing at once, which is what a long runway actually looks like.
Crucially, On remains small compared to giants like Nike and Adidas. A company that dominates its niche but has barely scratched the global market is precisely the setup that can multiply over many years.
NYSE: ONON
Key Data Points
Checking the rest of Lynch's boxes
The rest of the checklist lines up too. On is expanding a proven concept, taking a beloved premium product into new categories and countries rather than betting on something unproven. It commands real pricing power and brand loyalty, the hallmarks of a durable business. And the story is simple enough to explain in a sentence, another Lynch requirement. He also judged valuation against growth rather than in isolation, and while On is not cheap, a company compounding north of 20% can grow into a premium price in a way a slow mover never could.
I would not pretend this is a sure thing. On trades at a rich valuation, so any stumble could sting. It competes against deep-pocketed rivals such as Nike, Adidas, and the fast-rising Hoka, and footwear can be faddish, with today's must-have brand cooling tomorrow.
It is also worth being honest that at its current size, a literal tenfold gain would require On to become a global sportswear powerhouse, a long and demanding road that is far from guaranteed.
The takeaway for investors
Peter Lynch's real genius was recognizing great growth stories early, while they were still hiding in plain sight. On Holding checks his ten-bagger boxes about as neatly as any consumer stock I can find right now: a visible, beloved, fast-growing brand with multiple engines and a runway measured in years.
A tenfold return is never a promise, and it would take the patience most investors lack. But this is exactly the kind of company Lynch might have spotted on his morning run and quietly bought before the crowd. My honest read is that On belongs on the watch list of anyone hunting for the next great consumer growth story.
