The stocks featured in this article are seeing some big returns. Over the past month, they’ve outpaced the market due to some combination of positive news, upbeat results, or supportive macro developments. As such, investors are taking notice and bidding up shares.

While momentum can be a leading indicator, it has burned many investors as it doesn’t always correlate with long-term success. Keeping that in mind, here is one stock with lasting competitive advantages and two best left ignored.

Two Momentum Stocks to Sell:

Arhaus (ARHS)

One-Month Return: +2.7%

With an aesthetic that features natural materials such as reclaimed wood, Arhaus (NASDAQ: ARHS) is a high-end furniture retailer that sells everything from sofas to rugs to bookcases.

Why Is ARHS Not Exciting?

1. Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
2. Smaller revenue base of $1.34 billion means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
3. Earnings per share have dipped by 10.2% annually over the past three years, which is concerning because stock prices follow EPS over the long term

Arhaus is trading at $11.52 per share, or 26.1x forward P/E. If you’re considering ARHS for your portfolio, see our FREE research report to learn more.

Royal Caribbean (RCL)

One-Month Return: +16.5%

Established in 1968, Royal Caribbean Cruises (NYSE: RCL) is a global cruise vacation company renowned for its innovative and exciting cruise experiences.

Why Are We Wary of RCL?

1. Sluggish trends in its passenger cruise days suggest customers aren’t adopting its solutions as quickly as the company hoped
2. Estimated sales growth of 9.5% for the next 12 months implies demand will slow from its two-year trend
3. Underwhelming 1.2% return on capital reflects management’s difficulties in finding profitable growth opportunities

At $351.15 per share, Royal Caribbean trades at 21.2x forward P/E. Read our free research report to see why you should think twice about including RCL in your portfolio.

One Momentum Stock to Watch:

Apple (AAPL)

One-Month Return: +4.3%

Creator of the iPhone and App Store, Apple (NASDAQ: AAPL) is a legendary developer of consumer electronics and software.

Why Are We Fans of AAPL?

1. Apple's revenue base is so large because nearly everyone in the U.S. has an iPhone, but this is a double-edged sword. Growth must now come from upgrades, a harder pitch that has resulted in sluggish top-line performance recently.
2. Still, Apple's devices have endured for decades, speaking to its brand, design ethos, and technological chops. Its success is rare in the world of consumer electronics, which is fraught because of commoditization, competition, and obsolescence risk.
3. The company may not have the best gross margin because of its hardware orientation, but it still manages to produce elite operating and free cash flow margins. This shows it doesn’t need over-the-top marketing campaigns to convince people to buy its products.

Apple’s stock price of $239.23 implies a valuation ratio of 32.1x forward price-to-earnings. Is now the right 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).

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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