The stocks featured in this article are seeing some big returns. Over the past month, they’ve outpaced the market due to some combination of positive news, upbeat results, or supportive macro developments. As such, investors are taking notice and bidding up shares.
But not every company with momentum is a long-term winner, and plenty of investors have lost money betting on short-term fads. On that note, here is one stock with lasting competitive advantages and two that may correct.
Two Momentum Stocks to Sell:
Genco (GNK)
One-Month Return: +5.9%
Headquartered in NYC, Genco (NYSE:GNK) is a shipping company that transports dry bulk cargo along worldwide maritime routes.
Why Do We Pass on GNK?
- Demand for its offerings was relatively low as its number of owned vessels has underwhelmed
- Sales were less profitable over the last two years as its earnings per share fell by 43.5% annually, worse than its revenue declines
- Free cash flow margin shrank by 55.6 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
Genco is trading at $22.20 per share, or 20.4x forward P/E. Dive into our free research report to see why there are better opportunities than GNK.
XPO (XPO)
One-Month Return: -9.6%
Owning a mobile game simulating freight operations for the Tour de France, XPO (NYSE:XPO) is a transportation company specializing in expedited shipping services.
Why Are We Cautious About XPO?
- Muted 2.6% annual revenue growth over the last two years shows its demand lagged behind its industrials peers
- Competitive supply chain dynamics and steep production costs are reflected in its low gross margin of 17.3%
- Poor free cash flow margin of 1.8% for the last five years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
XPO’s stock price of $187.03 implies a valuation ratio of 46.5x forward P/E. Check out our free in-depth research report to learn more about why XPO doesn’t pass our bar.
One Momentum Stock to Buy:
ATI (ATI)
One-Month Return: +10.1%
With its materials flying in nearly every commercial and military aircraft in service today, ATI (NYSE:ATI) produces highly specialized materials and components for aerospace, defense, medical, and energy applications using advanced metallurgy and manufacturing processes.
Why Are We Bullish on ATI?
- Operating profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
- Share buybacks catapulted its annual earnings per share growth to 19.5%, which outperformed its revenue gains over the last two years
- Free cash flow margin jumped by 12.1 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
At $149.41 per share, ATI trades at 37.3x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 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 Exlservice (+354% five-year return). Find your next big winner with StockStory today.
