Exciting developments are taking place for the stocks in this article. They’ve all surged ahead of the broader market over the last month as catalysts such as new products and positive media coverage have propelled their returns.
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 are two stocks with the fundamentals to back up their performance and one best left ignored.
One Momentum Stock to Sell:
Caleres (CAL)
One-Month Return: +25%
The owner of Dr. Scholl's, Caleres (NYSE: CAL) is a footwear company offering a range of styles.
Why Do We Avoid CAL?
- Muted 3.6% annual revenue growth over the last five years shows its demand lagged behind its consumer discretionary peers
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
- 7× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings
Caleres is trading at $14.74 per share, or 8x forward P/E. If you’re considering CAL for your portfolio, see our FREE research report to learn more.
Two Momentum Stocks to Watch:
Ulta (ULTA)
One-Month Return: +19.4%
Offering high-end prestige brands as well as lower-priced, mass-market ones, Ulta Beauty (NASDAQ: ULTA) is an American retailer that sells makeup, skincare, haircare, and fragrance products.
Why Could ULTA Be a Winner?
- Rapid rollout of new stores to capitalize on market opportunities makes sense given its strong same-store sales performance
- Same-store sales growth averaged 3.5% over the past two years, showing it’s bringing new and repeat shoppers into its stores
- Stellar returns on capital showcase management’s ability to surface highly profitable business ventures
Ulta’s stock price of $540.13 implies a valuation ratio of 18.4x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
WEX (WEX)
One-Month Return: +25.9%
Originally founded in 1983 as Wright Express to serve the fleet card market, WEX (NYSE: WEX) provides payment processing and business solutions across fleet management, employee benefits, and corporate payments sectors.
Why Are We Positive on WEX?
- Performance over the past five years was boosted by share buybacks, which enabled its earnings per share to grow faster than its revenue
- ROE punches in at 18.2%, illustrating management’s expertise in identifying profitable investments
At $188.40 per share, WEX trades at 9.3x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
