Exciting developments are taking place for the stocks in this article. They’ve all surged ahead of the broader market over the last month as catalysts such as new products and positive media coverage have propelled their returns.
But not every company with momentum is a long-term winner, and plenty of investors have lost money betting on short-term fads. Keeping that in mind, here is one stock we think lives up to the hype and two that may correct.
Two Momentum Stocks to Sell:
Marriott Vacations (VAC)
One-Month Return: +24%
Spun off from Marriott International in 1984, Marriott Vacations (NYSE: VAC) is a vacation company providing leisure experiences for travelers around the world.
Why Is VAC Risky?
- Demand for its offerings was relatively low as its number of conducted tours has underwhelmed
- ROIC of 5.1% reflects management’s challenges in identifying attractive investment opportunities
- 7× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly
Marriott Vacations is trading at $83.50 per share, or 12.4x forward P/E. Check out our free in-depth research report to learn more about why VAC doesn’t pass our bar.
Fluence Energy (FLNC)
One-Month Return: +61.7%
Pioneering the use of lithium-ion batteries for grid storage, Fluence (NASDAQ: FLNC) helps store renewable energy sources with battery systems.
Why Is FLNC Not Exciting?
- High input costs result in an inferior gross margin of 6.4% that must be offset through higher volumes
- Free cash flow margin dropped by 12 percentage points over the last five years, implying the company increased its investment activities to fend off competitors
- Short cash runway increases the probability of a capital raise that dilutes existing shareholders
At $8.10 per share, Fluence Energy trades at 20x forward P/E. If you’re considering FLNC for your portfolio, see our FREE research report to learn more.
One Momentum Stock to Watch:
Globalstar (GSAT)
One-Month Return: +15.5%
Known for powering the emergency SOS feature in newer Apple iPhones, Globalstar (NASDAQ: GSAT) operates a network of low-earth orbit satellites that provide voice and data communications services in remote areas where traditional cellular networks don't reach.
Why Are We Fans of GSAT?
- Annual revenue growth of 20.7% over the past two years was outstanding, reflecting market share gains this cycle
- Incremental sales over the last two years have been highly profitable as its earnings per share increased by 33.7% annually, topping its revenue gains
- GSAT is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its recently improved profitability means it has even more resources to invest or distribute
Globalstar’s stock price of $27.01 implies a valuation ratio of 33.2x forward EV-to-EBITDA. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market 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
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