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.
While momentum can be a leading indicator, it has burned many investors as it doesn’t always correlate with long-term success. All that said, here is one stock we think lives up to the hype and two that may correct.
Two Stocks to Sell:
Hayward (HAYW)
One-Month Return: +16.9%
Credited with introducing the first variable-speed pool pump, Hayward (NYSE: HAYW) makes residential and commercial pool equipment and accessories.
Why Are We Wary of HAYW?
- Muted 2% annual revenue growth over the last five years shows its demand lagged behind its industrials peers
- Falling earnings per share over the last four years has some investors worried as stock prices ultimately follow EPS over the long term
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 8.9 percentage points
Hayward is trading at $16.50 per share, or 18.4x forward P/E. Read our free research report to see why you should think twice about including HAYW in your portfolio.
Ally Financial (ALLY)
One-Month Return: +8%
Born from the former GMAC (General Motors Acceptance Corporation) and rebranded in 2010, Ally Financial (NYSE: ALLY) operates a digital-first bank offering auto financing, insurance, mortgage lending, and investment services to consumers and commercial clients.
Why Do We Pass on ALLY?
- Sales trends were unexciting over the last two years as its 2.7% annual growth was below the typical financials company
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 4.8% annually
- 8× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings
At $46.25 per share, Ally Financial trades at 8.2x forward P/E. If you’re considering ALLY for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
BGC (BGC)
One-Month Return: +9.3%
Tracing its roots back to 1945 and named after founder Bernard Gerald Cantor, BGC Group (NASDAQ: BGC) operates a global brokerage and financial technology platform that facilitates trading across fixed income, foreign exchange, equities, energy, and commodities markets.
Why Should You Buy BGC?
- Market share has increased this cycle as its 24.8% annual revenue growth over the last two years was exceptional
- Earnings per share have massively outperformed its peers over the last two years, increasing by 24.6% annually
- Management team has demonstrated it can invest in profitable ventures through its 11.7% five-year return on equity
BGC’s stock price of $11.42 implies a valuation ratio of 8.5x 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
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum 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 Exlservice (+354% five-year return). Find your next big winner with StockStory today.
