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.
While momentum can be a leading indicator, it has burned many investors as it doesn’t always correlate with long-term success. On that note, here is one stock with the fundamentals to back up its performance and two best left ignored.
Two Momentum Stocks to Sell:
Quanex (NX)
One-Month Return: +16.4%
Starting in the seamless tube industry, Quanex (NYSE: NX) manufactures building products like window, door, kitchen, and bath cabinet components.
Why Does NX Fall Short?
- Costs have risen faster than its revenue over the last five years, causing its operating margin to decline by 17.6 percentage points
- Revenue growth over the past two years was nullified by the company’s new share issuances as its earnings per share fell by 12.6% annually
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Quanex is trading at $20.29 per share, or 10.5x forward P/E. Check out our free in-depth research report to learn more about why NX doesn’t pass our bar.
Stewart Information Services (STC)
One-Month Return: +16.7%
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 Do We Think Twice About STC?
- 1.2% annualized net premiums earned growth over the last five years lagged behind its insurance peers
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 6.5% annually
- Annual book value per share growth of 4.6% over the last two years was below our standards for the insurance sector
Stewart Information Services’s stock price of $71.31 implies a valuation ratio of 1.3x forward P/B. Dive into our free research report to see why there are better opportunities than STC.
One Momentum Stock to Buy:
DoorDash (DASH)
One-Month Return: +16.6%
Founded by Stanford students with the intent to build “the local, on-demand FedEx", DoorDash (NASDAQ: DASH) operates an on-demand food delivery platform.
Why Will DASH Beat the Market?
- Has the opportunity to boost monetization through new features and premium offerings as its orders have grown by 22% annually over the last two years
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 931% over the last three years outstripped its revenue performance
- Free cash flow margin jumped by 13 percentage points over the last few years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
At $172.61 per share, DoorDash trades at 20.7x forward EV/EBITDA. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
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.
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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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
