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.
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 Stocks to Sell:
Red Rock Resorts (RRR)
One-Month Return: -4.1%
Founded in 1976, Red Rock Resorts (NASDAQ: RRR) operates a range of casino resorts and entertainment properties, primarily in the Las Vegas metropolitan area.
Why Does RRR Fall Short?
- 7.1% annual revenue growth over the last five years was slower than its consumer discretionary peers
- Estimated sales growth of 1.8% for the next 12 months implies demand will slow from its two-year trend
- Diminishing returns on capital suggest its earlier profit pools are drying up
Red Rock Resorts is trading at $59.98 per share, or 35.9x forward P/E. If you’re considering RRR for your portfolio, see our FREE research report to learn more.
Somnigroup (SGI)
One-Month Return: -2.6%
Established through the merger of Tempur-Pedic and Sealy in 2012, Somnigroup (NYSE: SGI) is a bedding manufacturer known for its innovative memory foam mattresses and sleep products
Why Is SGI Not Exciting?
- Muted 10.1% annual revenue growth over the last two years shows its demand lagged behind its consumer discretionary peers
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 9.6% for the last two years
- Eroding returns on capital suggest its historical profit centers are aging
At $82.06 per share, Somnigroup trades at 29.5x forward P/E. To fully understand why you should be careful with SGI, check out our full research report (it’s free).
One Stock to Buy:
Cencora (COR)
One-Month Return: +2.9%
Formerly known as AmerisourceBergen until its 2023 rebranding, Cencora (NYSE: COR) is a global pharmaceutical distribution company that connects manufacturers with healthcare providers while offering logistics, data analytics, and consulting services.
Why Are We Backing COR?
- Enormous revenue base of $316.7 billion gives it leverage over plan holders and advantageous reimbursement terms with healthcare providers
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 15.2% exceeded its revenue gains over the last five years
- Industry-leading 57.1% return on capital demonstrates management’s skill in finding high-return investments
Cencora’s stock price of $298.07 implies a valuation ratio of 17.6x 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
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking 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).
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