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.
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 is one stock with lasting competitive advantages and two best left ignored.
Two Stocks to Sell:
Palo Alto Networks (PANW)
One-Month Return: +4.2%
Founded in 2005 by cybersecurity engineer Nir Zuk, Palo Alto Networks (NASDAQ: PANW) makes hardware and software cybersecurity products that protect companies from cyberattacks, breaches, and malware threats.
Why Is PANW Not Exciting?
- Annual revenue growth of 19.7% over the last three years was below our standards for the software sector
- Offerings struggled to generate meaningful interest as its average billings growth of 3% over the last year did not impress
Palo Alto Networks’s stock price of $200.54 implies a valuation ratio of 14x forward price-to-sales. To fully understand why you should be careful with PANW, check out our full research report (it’s free).
Allegro MicroSystems (ALGM)
One-Month Return: +34.4%
The result of a spinoff from Sanken in Japan, Allegro MicroSystems (NASDAQ: ALGM) is a designer of power management chips and distance sensors used in electric vehicles and data centers.
Why Is ALGM Risky?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 13.7% annually over the last two years
- Falling earnings per share over the last four years has some investors worried as stock prices ultimately follow EPS over the long term
- 10.5 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
Allegro MicroSystems is trading at $34.08 per share, or 67.7x forward P/E. If you’re considering ALGM for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
Uber (UBER)
One-Month Return: +8.5%
Notoriously funded with $7.7 billion from the Softbank Vision Fund, Uber (NYSE: UBER) operates a platform of on-demand services such as ride-hailing, food delivery, and freight.
Why Will UBER Beat the Market?
- Monthly Active Platform Consumers are rising, meaning the company can increase revenue without incurring additional customer acquisition costs if it can cross-sell additional products and features
- Incremental sales over the last three years have been highly profitable as its earnings per share increased by 183% annually, topping its revenue gains
- Free cash flow margin grew by 17.7 percentage points over the last few years, giving the company more chips to play with
At $91.30 per share, Uber trades at 21.6x forward EV/EBITDA. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our 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-small-cap company Exlservice (+354% 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
