Exciting developments are taking place for the stocks in this article. They’ve all surged ahead of the broader market over the last month as catalysts such as new products and positive media coverage have propelled their returns.
While momentum can be a leading indicator, it has burned many investors as it doesn’t always correlate with long-term success. On that note, here are two stocks with the fundamentals to back up their performance and one not so much.
One Momentum Stock to Sell:
AMC Networks (AMCX)
One-Month Return: +22.6%
Originally the joint-venture of four cable television companies, AMC Networks (NASDAQ: AMCX) is a broadcaster producing a diverse range of television shows and movies.
Why Should You Sell AMCX?
- Products and services have few die-hard fans as sales have declined by 5% annually over the last five years
- Poor free cash flow margin of 10.3% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
AMC Networks is trading at $12.42 per share, or 2.9x forward P/E. Read our free research report to see why you should think twice about including AMCX in your portfolio.
Two Momentum Stocks to Watch:
Celsius (CELH)
One-Month Return: +21.7%
With its proprietary MetaPlus formula as the basis for key products, Celsius (NASDAQ: CELH) offers energy drinks that feature natural ingredients to help in fitness and weight management.
Why Should CELH Be on Your Watchlist?
- Annual revenue growth of 47.4% over the last three years was superb and indicates its market share is rising
- Earnings per share grew by 91.4% annually over the last three years, massively outpacing its peers
- CELH is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its improved cash conversion implies it’s becoming a less capital-intensive business
At $35.05 per share, Celsius trades at 22.1x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Karat Packaging (KRT)
One-Month Return: +18.5%
Founded as Lollicup, Karat Packaging (NASDAQ: KRT) distributes and manufactures environmentally-friendly disposable foodservice packaging solutions.
Why Is KRT a Good Business?
- Offerings and unique value proposition resonate with customers, as seen in its above-market 9.8% annual sales growth over the last two years
- Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 25.7% annually
- Free cash flow margin jumped by 13.8 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
Karat Packaging’s stock price of $48.52 implies a valuation ratio of 25.4x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
