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.

While momentum can be a leading indicator, it has burned many investors as it doesn’t always correlate with long-term success. All that said, here are two stocks we think live up to the hype and one that may correct.

One Stock to Sell:

Flagstar Financial (FLG)

One-Month Return: +6.4%

Tracing its roots back to 1859 and rebranded from New York Community Bancorp in 2024, Flagstar Financial (NYSE: FLG) is a bank holding company that offers commercial and consumer banking services, with specialties in multi-family lending, mortgage originations, and warehouse lending.

Why Do We Steer Clear of FLG?

1. Sales tumbled by 9.3% annually over the last two years, showing market trends are working against its favor during this cycle
2. Incremental sales over the last five years were much less profitable as its earnings per share fell by 21% annually while its revenue grew
3. Tangible book value per share tumbled by 6.7% annually over the last five years, showing banking sector trends are working against its favor during this cycle

At $12.70 per share, Flagstar Financial trades at 0.7x forward P/B. Check out our free in-depth research report to learn more about why FLG doesn’t pass our bar.

Two Stocks to Buy:

Howmet (HWM)

One-Month Return: +8.6%

Inventing the first forged aluminum truck wheel, Howmet (NYSE: HWM) specializes in lightweight metals engineering and manufacturing multi-material components used in vehicles.

Why Will HWM Outperform?

1. Market share has increased this cycle as its 11.6% annual revenue growth over the last two years was exceptional
2. Share repurchases over the last two years enabled its annual earnings per share growth of 41.9% to outpace its revenue gains
3. Free cash flow margin increased by 11.3 percentage points over the last five years, giving the company more capital to invest or return to shareholders

Howmet’s stock price of $186 implies a valuation ratio of 49x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.

Houlihan Lokey (HLI)

One-Month Return: +7.6%

Founded in 1972 and known for its expertise in complex financial situations, Houlihan Lokey (NYSE: HLI) is a global investment bank specializing in mergers and acquisitions, capital markets, financial restructurings, and valuation advisory services.

Why Is HLI a Good Business?

1. Annual revenue growth of 17.2% over the last five years was superb and indicates its market share increased during this cycle
2. Incremental sales significantly boosted profitability as its annual earnings per share growth of 29% over the last two years outstripped its revenue performance
3. Annual tangible book value per share growth of 43.7% over the last two years was superb and indicates its capital strength increased during this cycle

Houlihan Lokey is trading at $205.19 per share, or 26.8x forward P/E. 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 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 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 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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