The stocks featured in this article have all approached their 52-week highs. When these price levels hit, it typically signals strong business execution, positive market sentiment, or significant industry tailwinds.
But not every company with momentum is a long-term winner, and plenty of investors have lost money betting on short-term fads. On that note, here is one stock with lasting competitive advantages and two not so much.
Two Stocks to Sell:
Boot Barn (BOOT)
One-Month Return: +11.1%
With a strong store presence in Texas, California, Florida, and Oklahoma, Boot Barn (NYSE: BOOT) is a western-inspired apparel and footwear retailer.
Why Are We Cautious About BOOT?
- Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations
- Modest revenue base of $1.91 billion gives it less fixed cost leverage and fewer distribution channels than larger companies
- Free cash flow margin dropped by 7.1 percentage points over the last year, implying the company became more capital intensive as competition picked up
Boot Barn’s stock price of $174.77 implies a valuation ratio of 27.9x forward P/E. Dive into our free research report to see why there are better opportunities than BOOT.
Kratos (KTOS)
One-Month Return: +34.4%
Established with a commitment to supporting national security, Kratos (NASDAQ: KTOS) is a provider of advanced engineering, technology, and security solutions tailored for critical national security applications.
Why Are We Hesitant About KTOS?
- Free cash flow margin shrank by 7 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
- Short cash runway increases the probability of a capital raise that dilutes existing shareholders
At $58.64 per share, Kratos trades at 108.2x forward P/E. If you’re considering KTOS for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
AutoZone (AZO)
One-Month Return: +0.5%
Aiming to be a one-stop shop for the DIY customer, AutoZone (NYSE: AZO) is an auto parts and accessories retailer that sells everything from car batteries to windshield wiper fluid to brake pads.
Why Is AZO a Good Business?
- Store expansion strategy is justified by its healthy same-store sales
- Differentiated product assortment leads to a best-in-class gross margin of 51.8%
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
AutoZone is trading at $3,729 per share, or 22.6x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
When Trump unveiled his aggressive tariff plan in April 2024, 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 6 Stocks for this week. 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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