Great things are happening to the stocks in this article. They’re all outperforming the market over the last month because of positive catalysts such as a new product line, constructive news flow, or even a loyal Reddit fanbase.
However, not all companies with momentum are long-term winners, and many investors have lost money by following short-term trends. On that note, here is one stock we think lives up to the hype and two best left ignored.
Two Momentum Stocks to Sell:
Edgewell Personal Care (EPC)
One-Month Return: +45.4%
Boasting brands such as Banana Boat, Schick, and Skintimate, Edgewell Personal Care (NYSE: EPC) sells personal care products in the skin and sun care, shave, and feminine care categories.
Why Do We Avoid EPC?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Operating margin declined by 7.3 percentage points over the last year as its sales cratered
- Performance over the past three years shows each sale was less profitable as its earnings per share dropped by 6.8% annually, worse than its revenue
At $25.48 per share, Edgewell Personal Care trades at 13.2x forward P/E. If you’re considering EPC for your portfolio, see our FREE research report to learn more.
Compass (COMP)
One-Month Return: +34%
Fueled by its mission to replace the "paper-driven, antiquated workflow" of buying a house, Compass (NYSE: COMP) is a digital-first company operating a residential real estate brokerage in the United States.
Why Do We Steer Clear of COMP?
- Performance surrounding its transactions has lagged its peers
- Suboptimal cost structure is highlighted by its history of operating margin losses
- Low free cash flow margin of 0.9% for the last two years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
Compass is trading at $11.12 per share, or 14.8x forward P/E. Check out our free in-depth research report to learn more about why COMP doesn’t pass our bar.
One Momentum Stock to Buy:
ATI (ATI)
One-Month Return: +17.6%
With its materials flying in nearly every commercial and military aircraft in service today, ATI (NYSE: ATI) produces highly specialized materials and components for aerospace, defense, medical, and energy applications using advanced metallurgy and manufacturing processes.
Why Is ATI a Top Pick?
- Annual revenue growth of 11.1% over the last five years was superb and indicates its market share increased during this cycle
- Performance over the past two years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Free cash flow margin expanded by 21.7 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
ATI’s stock price of $198.50 implies a valuation ratio of 43x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
