Exciting developments are taking place for the stocks in this article. They’ve all surged ahead of the broader market over the last month as catalysts such as new products and positive media coverage have propelled their returns.
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 we think lives up to the hype and two best left ignored.
Two Momentum Stocks to Sell:
Qorvo (QRVO)
One-Month Return: +19.1%
Formed by the merger of TriQuint and RF Micro Devices, Qorvo (NASDAQ: QRVO) is a designer and manufacturer of RF chips used in almost all smartphones globally, along with a variety of chips used in networking equipment and infrastructure.
Why Do We Avoid QRVO?
- Sales tumbled by 4.6% annually over the last two years, showing market trends are working against it during this cycle
- Forecasted revenue decline of 1.5% for the upcoming 12 months implies demand will fall even further
- Earnings per share decreased by more than its revenue over the last five years, showing each sale was less profitable
Qorvo is trading at $98.25 per share, or 12.7x forward P/E. Check out our free in-depth research report to learn more about why QRVO doesn’t pass our bar.
Stanley Black & Decker (SWK)
One-Month Return: +17.2%
With an iconic “STANLEY” logo which has remained virtually unchanged for over a century, Stanley Black & Decker (NYSE: SWK) is a manufacturer primarily catering to the tool and outdoor equipment industry.
Why Do We Think SWK Will Underperform?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Sales are projected to be flat over the next 12 months and imply weak demand
- Earnings per share have contracted by 15.9% annually over the last five years, a headwind for returns as stock prices often echo long-term EPS performance
Stanley Black & Decker’s stock price of $102.42 implies a valuation ratio of 17.7x forward P/E. Dive into our free research report to see why there are better opportunities than SWK.
One Momentum Stock to Buy:
DexCom (DXCM)
One-Month Return: +22.9%
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 Will DXCM Outperform?
- Core business can prosper without any help from acquisitions as its organic revenue growth averaged 12% over the past two years
- Free cash flow margin jumped by 20.2 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
- Returns on capital are growing as management capitalizes on its market opportunities
At $91.12 per share, DexCom trades at 32.3x forward P/E. Is now the right time to buy? See for yourself in our comprehensive 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 (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
