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.
But not every company with momentum is a long-term winner, and plenty of investors have lost money betting on short-term fads. Keeping that in mind, here is one stock with the fundamentals to back up its performance and two that may correct.
Two Stocks to Sell:
Caterpillar (CAT)
One-Month Return: +19.6%
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 Not Exciting?
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- Anticipated sales growth of 5.2% for the next year implies demand will be shaky
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 2.7% annually
At $539.20 per share, Caterpillar trades at 29x forward P/E. Dive into our free research report to see why there are better opportunities than CAT.
Eastern Bank (EBC)
One-Month Return: +2.6%
Founded in 1818 as one of America's oldest mutual banks before converting to a public company in 2020, Eastern Bankshares (NASDAQ: EBC) operates as a bank holding company providing commercial and retail banking services primarily in Massachusetts, New Hampshire, and Rhode Island.
Why Are We Wary of EBC?
- Annual revenue growth of 1.5% over the last five years was below our standards for the banking sector
- Annual tangible book value per share declines of 6.8% for the past four years show its capital management struggled during this cycle
- Tangible book value per share is projected to decrease by 2.8% over the next 12 months as capital generation weakens
Eastern Bank’s stock price of $18 implies a valuation ratio of 1x forward P/B. If you’re considering EBC for your portfolio, see our FREE research report to learn more.
One Stock to Watch:
Graham Corporation (GHM)
One-Month Return: +16.9%
Founded when its founder patented a unique design for a vacuum system used in the sugar refining process, Graham (NYSE: GHM) provides vacuum and heat transfer equipment for the energy, petrochemical, refining, and chemical sectors.
Why Do We Watch GHM?
- Sales pipeline is in good shape as its backlog averaged 21.7% growth over the past two years
- Operating margin improvement of 4.4 percentage points over the last five years demonstrates its ability to scale efficiently
- Incremental sales over the last two years have been highly profitable as its earnings per share increased by 145% annually, topping its revenue gains
Graham Corporation is trading at $61.09 per share, or 44.5x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 6 Stocks for this week. 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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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