The stocks featured in this article are seeing some big returns. Over the past month, they’ve outpaced the market due to new product launches, positive news, or even a dedicated social media following.
However, not all companies with momentum are long-term winners, and many investors have lost money by following short-term trends. Keeping that in mind, here is one stock with the fundamentals to back up its performance and two not so much.
Two Momentum Stocks to Sell:
Hanesbrands (HBI)
One-Month Return: +23%
A classic American staple founded in 1901, Hanesbrands (NYSE: HBI) is a clothing company known for its array of basic apparel including innerwear and activewear.
Why Do We Think HBI Will Underperform?
- Underwhelming constant currency revenue performance over the past two years suggests its product offering at current prices doesn’t resonate with customers
- Projected sales decline of 1.3% over the next 12 months indicates demand will continue deteriorating
- Performance over the past five years shows each sale was less profitable as its earnings per share dropped by 19% annually, worse than its revenue
Hanesbrands is trading at $5.34 per share, or 10.3x forward P/E. If you’re considering HBI for your portfolio, see our FREE research report to learn more.
Red Rock Resorts (RRR)
One-Month Return: +15%
Founded in 1976, Red Rock Resorts (NASDAQ: RRR) operates a range of casino resorts and entertainment properties, primarily in the Las Vegas metropolitan area.
Why Is RRR Risky?
- Lackluster 1.7% annual revenue growth over the last five years indicates the company is losing ground to competitors
- Demand will likely fall over the next 12 months as Wall Street expects flat revenue
- Diminishing returns on capital suggest its earlier profit pools are drying up
Red Rock Resorts’s stock price of $46.03 implies a valuation ratio of 28.3x forward P/E. Dive into our free research report to see why there are better opportunities than RRR.
One Momentum Stock to Watch:
SPX Technologies (SPXC)
One-Month Return: +26%
SPX Technologies (NYSE: SPXC) is an industrial conglomerate catering to the energy, manufacturing, automotive, and aerospace sectors.
Why Does SPXC Stand Out?
- Market share has increased this cycle as its 13.5% annual revenue growth over the last two years was exceptional
- Operating profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
- Earnings growth has trumped its peers over the last two years as its EPS has compounded at 25.5% annually
At $156.25 per share, SPX Technologies trades at 24.5x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio 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 176% over the last five years.
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.
