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. All that said, here is one stock with lasting competitive advantages and two best left ignored.
Two Stocks to Sell:
Varonis Systems (VRNS)
One-Month Return: +5%
Beginning with protecting Windows file shares in 2005 and evolving into a comprehensive security platform, Varonis Systems (NASDAQ: VRNS) provides data security software that helps organizations protect sensitive information, detect threats, and comply with privacy regulations.
Why Does VRNS Worry Us?
- 10.4% annual revenue growth over the last two years was slower than its software peers
- Suboptimal cost structure is highlighted by its history of operating margin losses
- Forecasted free cash flow margin suggests the company will fail to improve its cash conversion over the next year, indicating the company may be entering a more mature phase
Varonis Systems’s stock price of $61.24 implies a valuation ratio of 10.1x forward price-to-sales. To fully understand why you should be careful with VRNS, check out our full research report (it’s free for active Edge members).
Tapestry (TPR)
One-Month Return: -1.6%
Originally founded as Coach, Tapestry (NYSE: TPR) is an American fashion conglomerate with a portfolio of luxury brands offering high-quality accessories and fashion products.
Why Is TPR Not Exciting?
- Weak constant currency growth over the past two years indicates challenges in maintaining its market share
- Anticipated sales growth of 3.1% for the next year implies demand will be shaky
- Waning returns on capital imply its previous profit engines are losing steam
At $114.25 per share, Tapestry trades at 21.1x forward P/E. Dive into our free research report to see why there are better opportunities than TPR.
One Stock to Watch:
Charles Schwab (SCHW)
One-Month Return: +0.4%
Founded in 1971 as a disruptive force challenging Wall Street's high fees and limited access, Charles Schwab (NYSE: SCHW) is a wealth management and brokerage firm that provides investment services, banking, and financial advice to individual investors and independent advisors.
Why Do We Watch SCHW?
- Impressive 17.8% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Earnings growth has topped the peer group average over the last five years as its EPS has compounded at 14.5% annually
- Industry-leading 13.9% return on equity demonstrates management’s skill in finding high-return investments
Charles Schwab is trading at $94.31 per share, or 17.4x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free for active Edge members.
Stocks We Like Even More
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check 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 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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