The stocks in this article are all trading near their 52-week highs. This strength often reflects positive developments such as new product launches, favorable industry trends, or improved financial performance.

While momentum can be a leading indicator, it has burned many investors as it doesn’t always correlate with long-term success. On that note, here are two stocks with the fundamentals to back up their performance and one best left ignored.

One Stock to Sell:

Parker-Hannifin (PH)

One-Month Return: +1.8%

Founded in 1917, Parker Hannifin (NYSE: PH) is a manufacturer of motion and control systems for a wide variety of mobile, industrial and aerospace markets.

Why Do We Think Twice About PH?

1. Sizable revenue base leads to growth challenges as its 2% annual revenue increases over the last two years fell short of other industrials companies
2. Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
3. Anticipated sales growth of 3.9% for the next year implies demand will be shaky

At $752.33 per share, Parker-Hannifin trades at 25.8x forward P/E. Read our free research report to see why you should think twice about including PH in your portfolio.

Two Stocks to Watch:

Watts Water Technologies (WTS)

One-Month Return: +11%

Founded in 1874, Watts Water (NYSE: WTS) specializes in manufacturing water products and systems for residential, commercial, and industrial applications globally.

Why Does WTS Stand Out?

1. Superior product capabilities and pricing power are reflected in its best-in-class gross margin of 45.5%
2. Operating profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
3. Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue

Watts Water Technologies is trading at $280.57 per share, or 29.2x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.

Ameris Bancorp (ABCB)

One-Month Return: +8.5%

Tracing its roots back to 1971 and expanding significantly through both organic growth and strategic acquisitions, Ameris Bancorp (NYSE: ABCB) is a financial holding company that provides a full range of banking services to retail and commercial customers across select markets in the southeastern United States.

Why Do We Like ABCB?

1. Additional sales over the last two years increased its profitability as the 15% annual growth in its earnings per share outpaced its revenue
2. Impressive 14.6% annual tangible book value per share growth over the last five years indicates it’s building equity value this cycle
3. Market-beating return on equity illustrates that management has a knack for investing in profitable ventures

Ameris Bancorp’s stock price of $72.04 implies a valuation ratio of 1.2x forward P/B. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.

High-Quality Stocks for All Market Conditions

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