The stocks featured in this article have all approached their 52-week highs. When these price levels hit, it typically signals strong business execution, positive market sentiment, or significant industry tailwinds.
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 is one stock we think lives up to the hype and two that may correct.
Two Stocks to Sell:
Enact Holdings (ACT)
One-Month Return: +5.3%
Playing a critical role in helping first-time homebuyers access the housing market, Enact Holdings (NASDAQ:ACT) provides private mortgage insurance that enables lenders to offer home loans with lower down payments while protecting against borrower defaults.
Why Are We Cautious About ACT?
- Insurance offerings faced market headwinds this cycle, reflected in stagnant net premiums earned over the last five years
- Sales are projected to remain flat over the next 12 months as demand decelerates from its two-year trend
- Earnings per share lagged its peers over the last two years as they only grew by 4.9% annually
Enact Holdings’s stock price of $42.74 implies a valuation ratio of 1.1x forward P/B. Check out our free in-depth research report to learn more about why ACT doesn’t pass our bar.
Nelnet (NNI)
One-Month Return: +10.6%
Starting as a student loan servicer in the 1970s and evolving through the changing landscape of education finance, Nelnet (NYSE:NNI) provides student loan servicing, education technology, payment processing, and banking services while managing a portfolio of education loans.
Why Are We Wary of NNI?
- Incremental sales over the last five years were less profitable as its 4.3% annual earnings per share growth lagged its revenue gains
- Low return on equity reflects management’s struggle to allocate funds effectively
- High net-debt-to-EBITDA ratio of 12× increases the risk of forced asset sales or dilutive financing if operational performance weakens
At $141.76 per share, Nelnet trades at 15.5x forward P/E. If you’re considering NNI for your portfolio, see our FREE research report to learn more.
One Stock to Watch:
Tidewater (TDW)
One-Month Return: +7.3%
Operating one of the world’s largest fleets with over 200 vessels spanning 30 countries, Tidewater (NYSE:TDW) operates offshore service vessels that transport supplies, equipment, and workers to oil rigs and platforms.
Why Are We Fans of TDW?
- Impressive 27.8% annual revenue growth over the last five years indicates it’s winning market share this cycle
- EBITDA profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
- Robust free cash flow margin of 14.8% gives it many options for capital deployment
Tidewater is trading at $89.50 per share, or 21.2x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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 Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
