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 with the fundamentals to back up its performance and two that may correct.
Two Stocks to Sell:
Carnival (CCL)
One-Month Return: -1%
Boasting outrageous amenities like a planetarium on board its ships, Carnival (NYSE:CCL) is one of the world's largest leisure travel companies and a prominent player in the cruise industry.
Why Do We Think Twice About CCL?
- Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 9% for the last five years
- Estimated sales growth of 4.1% for the next 12 months implies demand will slow from its two-year trend
- Negative returns on capital show management lost money while trying to expand the business
At $29.02 per share, Carnival trades at 14.5x forward P/E. Check out our free in-depth research report to learn more about why CCL doesn’t pass our bar.
Gorman-Rupp (GRC)
One-Month Return: +7.8%
Powering fluid dynamics since 1934, Gorman-Rupp (NYSE:GRC) has evolved from its Ohio origins into a global manufacturer and seller of pumps and pump systems.
Why Does GRC Fall Short?
- 3.3% annual revenue growth over the last two years was slower than its industrials peers
- Anticipated sales growth of 3.7% for the next year implies demand will be shaky
- Free cash flow margin dropped by 4.7 percentage points over the last five years, implying the company became more capital intensive as competition picked up
Gorman-Rupp is trading at $40.85 per share, or 18.3x forward P/E. Dive into our free research report to see why there are better opportunities than GRC.
One Stock to Watch:
RBC Bearings (RBC)
One-Month Return: +3.3%
With a Guinness World Record for engineering the largest spherical plain bearing, RBC Bearings (NYSE:RBC) is a manufacturer of bearings and related components for the aerospace & defense, industrial, and transportation industries.
Why Is RBC Interesting?
- Annual revenue growth of 18.9% over the past five years was outstanding, reflecting market share gains this cycle
- Demand for the next 12 months is expected to accelerate above its two-year trend as Wall Street forecasts robust revenue growth of 14.7%
- Excellent operating margin of 20.2% highlights the efficiency of its business model, and it turbocharged its profits by achieving some fixed cost leverage
RBC Bearings’s stock price of $399.80 implies a valuation ratio of 33.7x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
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 5 Strong Momentum 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.