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.

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 with the fundamentals to back up their performance and one best left ignored.

One Stock to Sell:

Ducommun (DCO)

One-Month Return: -1.5%

California’s oldest company, Ducommun (NYSE: DCO) is a provider of engineering and manufacturing services for high-performance products primarily within the aerospace and defense industries.

Why Do We Think Twice About DCO?

1. New orders were hard to come by as its average backlog growth of 3.8% over the past two years underwhelmed
2. Low free cash flow margin of 1.4% for the last five years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
3. Underwhelming 4.5% return on capital reflects management’s difficulties in finding profitable growth opportunities

At $91.22 per share, Ducommun trades at 22.4x forward P/E. Check out our free in-depth research report to learn more about why DCO doesn’t pass our bar.

Two Stocks to Watch:

Arlo Technologies (ARLO)

One-Month Return: +7.7%

Originally spun off from networking equipment maker Netgear in 2018, Arlo Technologies (NYSE: ARLO) provides cloud-based smart security devices and subscription services that help consumers and businesses monitor and protect their homes, properties, and loved ones.

Why Does ARLO Stand Out?

1. Operating margin expanded by 13.1 percentage points over the last five years as it scaled and became more efficient
2. Incremental sales over the last two years have been highly profitable as its earnings per share increased by 434% annually, topping its revenue gains
3. Free cash flow margin jumped by 17.4 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends

Arlo Technologies’s stock price of $17.35 implies a valuation ratio of 25.8x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.

Cadence Bank (CADE)

One-Month Return: +8.4%

With roots dating back to 1885 and a strategic focus on middle-market commercial lending, Cadence Bancorporation (NYSE: CADE) is a bank holding company that provides commercial banking, retail banking, and wealth management services to middle-market businesses and individuals.

Why Could CADE Be a Winner?

1. Annual net interest income growth of 17% over the past five years was outstanding, reflecting market share gains this cycle
2. Net interest income outlook for the upcoming 12 months implies the business will stay on its desirable five-year growth trajectory
3. Balance sheet strength has increased this cycle as its 23.6% annual tangible book value per share growth over the last two years was exceptional

Cadence Bank is trading at $37.64 per share, or 1.2x forward P/B. Is now a good time to buy? See for yourself 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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