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 lasting competitive advantages and two that may correct.
Two Stocks to Sell:
Encompass Health (EHC)
One-Month Return: +0.7%
With a network of 161 specialized facilities across 37 states and Puerto Rico, Encompass Health (NYSE: EHC) operates inpatient rehabilitation hospitals that help patients recover from strokes, hip fractures, and other debilitating conditions.
Why Are We Wary of EHC?
- 4.3% annual revenue growth over the last five years was slower than its healthcare peers
- 1 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
Encompass Health’s stock price of $124.52 implies a valuation ratio of 23.6x forward P/E. Check out our free in-depth research report to learn more about why EHC doesn’t pass our bar.
Stewart Information Services (STC)
One-Month Return: +3.2%
Founded in 1893 during America's westward expansion when property records were often disputed, Stewart Information Services (NYSE: STC) provides title insurance and real estate services, helping homebuyers, sellers, and lenders verify property ownership and protect against title defects.
Why Does STC Worry Us?
- Growth in insurance policies was lackluster over the last two years as its 1.3% annual growth underperformed the typical financial institution
- Earnings per share were flat over the last five years while its revenue grew, showing its incremental sales were less profitable
- Capital trends were unexciting over the last two years as its 1.6% annual book value per share growth was below the typical insurance firm
Stewart Information Services is trading at $72.78 per share, or 1.4x forward P/B. Dive into our free research report to see why there are better opportunities than STC.
One Stock to Buy:
Nova (NVMI)
One-Month Return: +37.2%
Headquartered in Israel, Nova (NASDAQ: NVMI) is a provider of quality control systems used in semiconductor manufacturing.
Why Are We Bullish on NVMI?
- Market share has increased this cycle as its 21.1% annual revenue growth over the last two years was exceptional
- Earnings per share have massively outperformed its peers over the last five years, increasing by 34.1% annually
- NVMI is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
At $325.36 per share, Nova trades at 38.1x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 6 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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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