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.
But not every company with momentum is a long-term winner, and plenty of investors have lost money betting on short-term fads. All that said, here are two stocks with the fundamentals to back up their performance and one best left ignored.
One Stock to Sell:
Live Oak Bancshares (LOB)
One-Month Return: +9.1%
Founded during the 2008 financial crisis with a vision to reimagine small business banking through technology, Live Oak Bancshares (NYSE: LOB) is a bank holding company that specializes in providing online banking services and SBA-guaranteed loans to small businesses across targeted industries nationwide.
Why Are We Wary of LOB?
- Inferior net interest margin of 3.3% means it must compensate for lower profitability through increased loan originations
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 2.3% annually
Live Oak Bancshares is trading at $41.05 per share, or 1.5x forward P/B. If you’re considering LOB for your portfolio, see our FREE research report to learn more.
Two Stocks to Buy:
Palomar Holdings (PLMR)
One-Month Return: +31.1%
Founded in 2013 to fill gaps in catastrophe insurance markets, Palomar Holdings (NASDAQ: PLMR) is a specialty insurance provider that offers property and casualty insurance products in underserved markets, with a focus on earthquake coverage.
Why Is PLMR a Good Business?
- Strong 55.8% annualized net premiums earned expansion over the last two years shows it’s capturing market share this cycle
- Annual book value per share growth of 34% over the past two years was outstanding, reflecting strong capital accumulation this cycle
- Notable projected book value per share growth of 26.2% for the next 12 months hints at strong capital generation
Palomar Holdings’s stock price of $140 implies a valuation ratio of 3.2x forward P/B. Is now the right time to buy? Find out in our full research report, it’s free.
ServisFirst Bancshares (SFBS)
One-Month Return: +10.8%
Founded in 2005 with a focus on serving underserved mid-sized businesses, ServisFirst Bancshares (NYSE: SFBS) is a bank holding company that provides commercial banking services to businesses and professionals through its subsidiary ServisFirst Bank.
Why Will SFBS Outperform?
- Annual revenue growth of 17.5% over the last two years was superb and indicates its market share increased during this cycle
- Net interest margin expanded by 53.2 basis points (100 basis points = 1 percentage point) over the last two years, providing additional flexibility for investments
- Annual tangible book value per share growth of 13.1% over the last five years was superb and indicates its capital strength increased during this cycle
At $86.64 per share, ServisFirst Bancshares trades at 2.2x forward P/B. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
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 meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
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.
