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. Keeping that in mind, here are two stocks with lasting competitive advantages and one not so much.
One Stock to Sell:
Voya Financial (VOYA)
One-Month Return: +7.8%
Originally spun off from Dutch financial giant ING in 2013 and rebranded with a name suggesting "voyage," Voya Financial (NYSE: VOYA) provides workplace benefits and savings solutions to U.S. employers, helping their employees achieve better financial outcomes through retirement plans and insurance products.
Why Do We Think Twice About VOYA?
- 5.5% annual revenue growth over the last two years was slower than its financials peers
- Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 4.9% annually
- Tangible book value per share tumbled by 13.1% annually over the last five years, showing financials sector trends are working against its favor during this cycle
At $81.38 per share, Voya Financial trades at 8.4x forward P/E. If you’re considering VOYA for your portfolio, see our FREE research report to learn more.
Two Stocks to Watch:
Nextpower (NXT)
One-Month Return: +26.3%
With its technology playing a key role in the massive 1.2 gigawatt Noor Abu Dhabi solar farm project, Nextpower (NASDAQ: NXT) is a provider of solar tracker systems that help solar panels follow the sun.
Why Will NXT Beat the Market?
- Impressive 19.3% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Free cash flow margin expanded by 25.3 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
- Rising returns on capital show management is finding more attractive investment opportunities
Nextpower is trading at $134.50 per share, or 30.9x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Caterpillar (CAT)
One-Month Return: +8.3%
With its iconic yellow machinery working on construction sites, Caterpillar (NYSE: CAT) manufactures construction equipment like bulldozers, excavators, and parts and maintenance services.
Why Is CAT Interesting?
- Healthy operating margin of 16.9% shows it’s a well-run company with efficient processes, and its profits increased over the last five years as it scaled
- Free cash flow margin increased by 5 percentage points over the last five years, giving the company more capital to invest or return to shareholders
- ROIC punches in at 36.6%, illustrating management’s expertise in identifying profitable investments
Caterpillar’s stock price of $864.50 implies a valuation ratio of 35.2x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
High-Quality Stocks for All Market Conditions
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren't just high-quality businesses. Something is happening with them right now. Elite fundamentals meeting near-term momentum - both boxes checked at the same time.
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
