The stocks in this article are all trading near their 52-week highs. This strength often reflects positive developments such as new product launches, favorable industry trends, or improved financial performance.
But not every company with momentum is a long-term winner, and plenty of investors have lost money betting on short-term fads. Keeping that in mind, here is one stock with lasting competitive advantages and two not so much.
Two Stocks to Sell:
Wayfair (W)
One-Month Return: +17.4%
Founded in 2002 by Niraj Shah, Wayfair (NYSE: W) is a leading online retailer of mass-market home goods in the US, UK, Canada, and Germany.
Why Does W Worry Us?
- Value proposition isn’t resonating strongly as its active customers averaged 1.8% drops over the last two years
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 5.2%
- Gross margin of 30.2% is below its competitors, leaving less money to invest in areas like marketing and R&D
At $98.82 per share, Wayfair trades at 16.3x forward EV/EBITDA. If you’re considering W for your portfolio, see our FREE research report to learn more.
State Street (STT)
One-Month Return: +0.1%
Dating back to 1792 when Boston's Long Wharf was the center of global shipping and trade, State Street (NYSE: STT) provides custody, investment management, and other financial services to institutional investors like pension funds, asset managers, and central banks worldwide.
Why Is STT Not Exciting?
- Annual sales growth of 3% over the last five years lagged behind its financials peers as its large revenue base made it difficult to generate incremental demand
- Earnings per share lagged its peers over the last five years as they only grew by 7.3% annually
State Street’s stock price of $117 implies a valuation ratio of 10.5x forward P/E. Check out our free in-depth research report to learn more about why STT doesn’t pass our bar.
One Stock to Watch:
Xylem (XYL)
One-Month Return: -0.2%
Formed through a spinoff, Xylem (NYSE: XYL) manufactures and services engineered products across a wide variety of applications primarily in the water sector.
Why Are We Fans of XYL?
- Market share has increased this cycle as its 14.8% annual revenue growth over the last two years was exceptional
- Offerings are difficult to replicate at scale and lead to a top-tier gross margin of 37.7%
- Earnings growth has trumped its peers over the last five years as its EPS has compounded at 17.7% annually
Xylem is trading at $149.60 per share, or 27.6x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 5 Growth Stocks for this month. 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 Kadant (+351% 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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