The stocks featured in this article are seeing some big returns. Over the past month, they’ve outpaced the market due to some combination of positive news, upbeat results, or supportive macro developments. As such, investors are taking notice and bidding up shares.
While momentum can be a leading indicator, it has burned many investors as it doesn’t always correlate with long-term success. Keeping that in mind, here is one stock with lasting competitive advantages and two not so much.
Two Momentum Stocks to Sell:
Universal Technical Institute (UTI)
One-Month Return: +10.4%
Founded in 1965, Universal Technical Institute (NYSE: UTI) is a leading provider of technical training programs, specializing in automotive, diesel, collision repair, motorcycle, and marine technicians.
Why Do We Think UTI Will Underperform?
- Projected 2.6 percentage point decline in its free cash flow margin next year reflects the company’s plans to increase its investments to defend its market position
- Below-average returns on capital indicate management struggled to find compelling investment opportunities, and its decreasing returns suggest its historical profit centers are aging
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
Universal Technical Institute’s stock price of $30.53 implies a valuation ratio of 14.7x forward EV-to-EBITDA. To fully understand why you should be careful with UTI, check out our full research report (it’s free for active Edge members).
Advanced Energy (AEIS)
One-Month Return: +21.8%
Pioneering technologies for radio frequency power delivery, Advanced Energy (NASDAQ: AEIS) provides power supplies, thermal management systems, and measurement and control instruments for various manufacturing processes.
Why Do We Avoid AEIS?
- Sales tumbled by 5.9% annually over the last two years, showing market trends are working against its favor during this cycle
- Performance over the past two years shows each sale was less profitable as its earnings per share dropped by 9.9% annually, worse than its revenue
- Waning returns on capital imply its previous profit engines are losing steam
Advanced Energy is trading at $192.22 per share, or 31.9x forward P/E. Dive into our free research report to see why there are better opportunities than AEIS.
One Momentum Stock to Buy:
Astronics (ATRO)
One-Month Return: +19.4%
Integrating power outlets into many Boeing aircraft, Astronics (NASDAQ: ATRO) is a provider of technologies and services to the global aerospace, defense, and electronics industries.
Why Should You Buy ATRO?
- Annual revenue growth of 15.1% over the last two years was superb and indicates its market share increased during this cycle
- Free cash flow profile has moved into positive territory over the last five years, indicating the company has passed a significant test
- Returns on capital are increasing as management’s prior bets are starting to bear fruit
At $47.87 per share, Astronics trades at 25.5x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free for active Edge members.
Stocks We Like Even More
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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