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.
However, not all companies with momentum are long-term winners, and many investors have lost money by following short-term trends. All that said, here is one stock we think lives up to the hype and two not so much.
Two Stocks to Sell:
Fresh Del Monte Produce (FDP)
One-Month Return: +4.8%
Translating to "of the mountain" in Spanish, Fresh Del Monte (NYSE: FDP) is a leader in providing high-quality, sustainably grown fresh fruits and vegetables.
Why Do We Avoid FDP?
- Sales stagnated over the last three years and signal the need for new growth strategies
- Easily substituted products (and therefore stiff competition) result in an inferior gross margin of 8.2% that must be offset through higher volumes
- ROIC of 5.3% reflects management’s challenges in identifying attractive investment opportunities
Fresh Del Monte Produce’s stock price of $35.02 implies a valuation ratio of 8.7x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why FDP doesn’t pass our bar.
Honeywell (HON)
One-Month Return: +5.9%
Originally founded in 1906 as a thermostat company, Honeywell (NASDAQ: HON) is a multinational conglomerate known for its aerospace systems, building technologies, performance materials, and safety and productivity solutions.
Why Does HON Give Us Pause?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 3.3%
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 3.2 percentage points
Honeywell is trading at $226.90 per share, or 21.3x forward P/E. If you’re considering HON for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
Netflix (NFLX)
One-Month Return: +7.6%
Launched by Reed Hastings as a DVD mail rental company until its famous pivot to streaming in 2007, Netflix (NASDAQ: NFLX) is a pioneering streaming content platform.
Why Are We Bullish on NFLX?
- Global Streaming Paid Memberships have increased by an average of 13.5% annually, giving it the potential for margin-accretive growth if it can develop valuable complementary products and features
- Disciplined cost controls and effective management resulted in a strong two-year EBITDA margin of 27%, and it turbocharged its profits by achieving some fixed cost leverage
- Free cash flow margin jumped by 18.6 percentage points over the last few years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
At $1,220 per share, Netflix trades at 37.6x forward EV/EBITDA. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 5 Growth Stocks for this month. 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.