Each stock in this article is trading near its 52-week high. These elevated prices usually indicate some degree of investor confidence, business improvements, or favorable market conditions.

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 is one stock with lasting competitive advantages and two that may correct.

Two Stocks to Sell:

Zillow (ZG)

One-Month Return: +7.2%

Founded by Expedia co-founders Lloyd Frink and Rich Barton, Zillow (NASDAQ: ZG) is the leading U.S. online real estate marketplace.

Why Do We Steer Clear of ZG?

1. Annual revenue declines of 7.8% over the last five years indicate problems with its market positioning
2. Suboptimal cost structure is highlighted by its history of operating margin losses
3. Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results

Zillow is trading at $84.50 per share, or 44.5x forward P/E. Check out our free in-depth research report to learn more about why ZG doesn’t pass our bar.

Crane NXT (CXT)

One-Month Return: +4.9%

Born from a corporate transformation completed in 2023, Crane NXT (NYSE: CXT) provides specialized technology solutions for payment processing, banknote security, and authentication systems for financial institutions and businesses.

Why Does CXT Give Us Pause?

1. 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
2. Incremental sales over the last two years were much less profitable as its earnings per share fell by 15% annually while its revenue grew
3. 12 percentage point decline in its free cash flow margin over the last four years reflects the company’s increased investments to defend its market position

Crane NXT’s stock price of $62.61 implies a valuation ratio of 13.3x forward P/E. Dive into our free research report to see why there are better opportunities than CXT.

One Stock to Watch:

ResMed (RMD)

One-Month Return: +4.1%

Founded in 1989 to address the then-underdiagnosed condition of sleep apnea, ResMed (NYSE: RMD) develops cloud-connected medical devices and software solutions that treat sleep apnea, COPD, and other respiratory disorders for home and clinical use.

Why Is RMD on Our Radar?

1. Average constant currency growth of 10.3% over the past two years demonstrates its ability to grow internationally despite currency fluctuations
2. Incremental sales significantly boosted profitability as its annual earnings per share growth of 14.9% over the last five years outstripped its revenue performance
3. Free cash flow margin increased by 12.5 percentage points over the last five years, giving the company more capital to invest or return to shareholders

At $284.72 per share, ResMed trades at 27.5x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.

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 9 Market-Beating Stocks. 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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