Great things are happening to the stocks in this article. They’re all outperforming the market over the last month because of positive catalysts such as a new product line, constructive news flow, or even a loyal Reddit fanbase.

However, not all companies with momentum are long-term winners, and many investors have lost money by following short-term trends. On that note, here is one stock with the fundamentals to back up its performance and two best left ignored.

Two Momentum Stocks to Sell:

Papa John's (PZZA)

One-Month Return: +15.8%

Founded by the eclectic John “Papa John” Schnatter, Papa John’s (NASDAQ: PZZA) is a globally recognized pizza delivery and carryout chain known for “better ingredients” and “better pizza”.

Why Are We Hesitant About PZZA?

1. Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new restaurants
2. Estimated sales growth of 1.5% for the next 12 months implies demand will slow from its six-year trend
3. Lacking pricing power results in an inferior gross margin of 14.8% that must be offset by turning more tables

At $55.50 per share, Papa John's trades at 27.4x forward P/E. To fully understand why you should be careful with PZZA, check out our full research report (it’s free for active Edge members).

Mayville Engineering (MEC)

One-Month Return: +21%

Originally founded solely on tool and die manufacturing, Mayville Engineering Company (NYSE: MEC) specializes in metal fabrication, tube bending, and welding to be used in various industries.

Why Are We Out on MEC?

1. Annual sales declines of 2% for the past two years show its products and services struggled to connect with the market during this cycle
2. High input costs result in an inferior gross margin of 12.8% that must be offset through higher volumes
3. Earnings per share have dipped by 43.3% annually over the past two years, which is concerning because stock prices follow EPS over the long term

Mayville Engineering is trading at $16.52 per share, or 94.8x forward P/E. Check out our free in-depth research report to learn more about why MEC doesn’t pass our bar.

One Momentum Stock to Buy:

Powell (POWL)

One-Month Return: +19.5%

Originally a metal-working shop supporting local petrochemical facilities, Powell (NYSE: POWL) has grown from a small Houston manufacturer to a global provider of electrical systems.

Why Will POWL Beat the Market?

1. Annual revenue growth of 28.7% over the past two years was outstanding, reflecting market share gains this cycle
2. Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 124% outpaced its revenue gains
3. Free cash flow margin expanded by 12.8 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends

Powell’s stock price of $362 implies a valuation ratio of 25.2x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.

High-Quality Stocks for All Market Conditions

When Trump unveiled his aggressive tariff plan in April 2025, 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 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

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