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. Keeping that in mind, here is one stock with lasting competitive advantages and two best left ignored.
Two Momentum Stocks to Sell:
Vishay Intertechnology (VSH)
One-Month Return: +68.7%
Named after the founder’s ancestral village in present-day Lithuania, Vishay Intertechnology (NYSE:VSH) manufactures simple chips and electronic components that are building blocks of virtually all types of electronic devices.
Why Is VSH Risky?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 1.3% annually over the last two years
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 51.9% annually
- Cash burn has widened over the last five years, making us question whether it can reliably generate shareholder value
Vishay Intertechnology’s stock price of $58.77 implies a valuation ratio of 2.1x forward price-to-sales. If you’re considering VSH for your portfolio, see our FREE research report to learn more.
Crocs (CROX)
One-Month Return: +26.9%
Founded in 2002, Crocs (NASDAQ:CROX) sells casual footwear and is known for its iconic clog shoe.
Why Should You Dump CROX?
- Constant currency growth was below our standards over the past two years, suggesting it might need to invest in product improvements to get back on track
- Operating margin of 14.1% falls short of the industry average, and the smaller profit dollars make it harder to react to unexpected market developments
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
Crocs is trading at $127.39 per share, or 8.6x forward P/E. Check out our free in-depth research report to learn more about why CROX doesn’t pass our bar.
One Momentum Stock to Buy:
DexCom (DXCM)
One-Month Return: +32%
Founded in 1999 and receiving its first FDA approval in 2006, DexCom (NASDAQ:DXCM) develops and sells continuous glucose monitoring systems that allow people with diabetes to track their blood sugar levels without repeated finger pricks.
Why Are We Bullish on DXCM?
- Existing business lines can expand without risky acquisitions as its organic revenue growth averaged 12.5% over the past two years
- Free cash flow margin grew by 26 percentage points over the last five years, giving the company more chips to play with
- Returns on capital are growing as management capitalizes on its market opportunities
At $78.30 per share, DexCom trades at 28.6x 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
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
