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.
However, not all companies with momentum are long-term winners, and many investors have lost money by following short-term trends. Keeping that in mind, here is one stock with lasting competitive advantages and two not so much.
Two Stocks to Sell:
General Motors (GM)
One-Month Return: +11.7%
Founded in 1908 by William C. Durant, General Motors (NYSE: GM) offers a range of vehicles and automobiles through brands such as Chevrolet, Buick, GMC, and Cadillac.
Why Are We Hesitant About GM?
- Disappointing unit sales over the past two years show it’s struggled to increase its sales volumes and had to rely on price increases
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 7.9 percentage points
- 5× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly
General Motors is trading at $58.68 per share, or 6.4x forward P/E. Read our free research report to see why you should think twice about including GM in your portfolio.
Cognex (CGNX)
One-Month Return: +9.2%
Founded in 1981 when computer vision was in its infancy, Cognex (NASDAQ: CGNX) develops machine vision systems and software that help manufacturers and logistics companies automate quality inspection and tracking of products.
Why Does CGNX Give Us Pause?
- 2% annual revenue growth over the last two years was slower than its business services peers
- Free cash flow margin shrank by 15.8 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
- Diminishing returns on capital suggest its earlier profit pools are drying up
Cognex’s stock price of $44.18 implies a valuation ratio of 44.9x forward P/E. To fully understand why you should be careful with CGNX, check out our full research report (it’s free).
One Stock to Buy:
HCA Healthcare (HCA)
One-Month Return: +13.2%
With roots dating back to 1968 and a network spanning 20 states, HCA Healthcare (NYSE: HCA) operates a network of 190 hospitals and 150+ outpatient facilities providing a full range of medical services across the US and England.
Why Will HCA Outperform?
- Massive revenue base of $72.7 billion in a highly regulated sector makes the company difficult to replace, giving it meaningful negotiating power
- Share repurchases over the last five years enabled its annual earnings per share growth of 17.5% to outpace its revenue gains
- Free cash flow margin increased by 8.9 percentage points over the last five years, giving the company more capital to invest or return to shareholders
At $403.96 per share, HCA Healthcare trades at 15.1x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
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 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-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
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