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. Keeping that in mind, here is one stock with lasting competitive advantages and two that may correct.
Two Stocks to Sell:
Pegasystems (PEGA)
One-Month Return: +7%
Founded by Alan Trefler in 1983, Pegasystems (NASDAQ: PEGA) offers a software-as-a-service platform to automate and optimize workflows in customer service and engagement.
Why Does PEGA Fall Short?
- 11.1% annual revenue growth over the last three years was slower than its software peers
- Estimated sales growth of 3.6% for the next 12 months implies demand will slow from its three-year trend
- Competitive market means the company must spend more on sales and marketing to stand out even if the return on investment is low
Pegasystems’s stock price of $58.51 implies a valuation ratio of 6.1x forward price-to-sales. Dive into our free research report to see why there are better opportunities than PEGA.
Orion (ORN)
One-Month Return: -20.6%
Established in 1994, Orion (NYSE: ORN) provides construction services for marine infrastructure and industrial projects.
Why Is ORN Risky?
- Sales pipeline suggests its future revenue growth won’t meet our standards as its backlog averaged 1.7% declines over the past two years
- Gross margin of 9.3% is below its competitors, leaving less money to invest in areas like marketing and R&D
- Negative free cash flow raises questions about the return timeline for its investments
At $7.18 per share, Orion trades at 30.3x forward P/E. Read our free research report to see why you should think twice about including ORN in your portfolio.
One Stock to Watch:
Cadence (CDNS)
One-Month Return: +14.3%
With the name chosen to reflect the idea of a repeating pattern or rhythm in electronic design, Cadence Design Systems (NASDAQ: CDNS) offers a software-as-a-service platform for semiconductor engineering and design.
Why Is CDNS on Our Radar?
- Billings growth has averaged 25.5% over the last year, indicating a healthy pipeline of new contracts that should drive future revenue increases
- Well-designed software integrates seamlessly with other workflows, enabling swift payback periods on marketing expenses and customer growth at scale
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
Cadence is trading at $366.10 per share, or 18x forward price-to-sales. Is now a good time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Donald Trump’s April 2024 "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 6 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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