Each stock in this article is trading near its 52-week high. These elevated prices usually indicate some degree of investor confidence, business improvements, or favorable market conditions.
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 that may correct.
Two Stocks to Sell:
ADT (ADT)
One-Month Return: -3.4%
Founded in 1874 and headquartered in Boca Raton, Florida, ADT (NYSE: ADT) is a provider of security, automation, and smart home solutions, offering comprehensive services for home and business protection.
Why Does ADT Give Us Pause?
- Performance surrounding its customers has lagged its peers
- Anticipated sales growth of 4.3% for the next year implies demand will be shaky
- Low returns on capital reflect management’s struggle to allocate funds effectively
ADT is trading at $8.30 per share, or 9.6x forward P/E. If you’re considering ADT for your portfolio, see our FREE research report to learn more.
IBM (IBM)
One-Month Return: +8.6%
With a corporate history spanning over a century and once known for its iconic mainframe computers, IBM (NYSE: IBM) provides hybrid cloud computing platforms, AI solutions, consulting services, and enterprise infrastructure to help businesses modernize their operations.
Why Do We Pass on IBM?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 1.3% annually over the last five years
- Earnings per share were flat over the last five years and fell short of the peer group average
- Low returns on capital reflect management’s struggle to allocate funds effectively
IBM’s stock price of $287.90 implies a valuation ratio of 26.3x forward P/E. Dive into our free research report to see why there are better opportunities than IBM.
One Stock to Watch:
Itron (ITRI)
One-Month Return: +12.8%
Founded by a small group of engineers who wanted to build a more efficient way to read utility meters, Itron (NASDAQ: ITRI) offers energy and water management products for the utility industry, municipalities, and industrial customers.
Why Do We Like ITRI?
- Operating margin increased by 11.6 percentage points over the last five years as it refined its cost structure
- Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 98.7% outpaced its revenue gains
- Free cash flow margin increased by 5.3 percentage points over the last five years, giving the company more capital to invest or return to shareholders
At $134.75 per share, Itron trades at 24.5x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 5 Strong Momentum 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 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
