Each stock in this article is trading near its 52-week high. These elevated prices usually indicate some degree of investor confidence, business improvements, or favorable market conditions.
But not every company with momentum is a long-term winner, and plenty of investors have lost money betting on short-term fads. Keeping that in mind, here is one stock we think lives up to the hype and two that may correct.
Two Stocks to Sell:
Steven Madden (SHOO)
One-Month Return: +19%
As seen in the infamous Wolf of Wall Street movie, Steven Madden (NASDAQ: SHOO) is a fashion brand famous for its trendy and innovative footwear, appealing to a young and style-conscious audience.
Why Should You Sell SHOO?
- Muted 17% annual revenue growth over the last five years shows its demand lagged behind its consumer discretionary peers
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
Steven Madden’s stock price of $46.16 implies a valuation ratio of 1.1x forward price-to-sales. To fully understand why you should be careful with SHOO, check out our full research report (it’s free).
Encore Capital Group (ECPG)
One-Month Return: -0.3%
Operating in the often misunderstood world of debt collection since 1999, Encore Capital Group (NASDAQ: ECPG) purchases portfolios of defaulted consumer debt at deep discounts and works with individuals to recover these obligations while helping them toward financial recovery.
Why Are We Wary of ECPG?
- Muted 2.6% annual revenue growth over the last five years shows its demand lagged behind its financials peers
- Earnings per share lagged its peers over the last five years as they only grew by 3.7% annually
- High net-debt-to-EBITDA ratio of 5× increases the risk of forced asset sales or dilutive financing if operational performance weakens
At $81.37 per share, Encore Capital Group trades at 6.5x forward P/E. Check out our free in-depth research report to learn more about why ECPG doesn’t pass our bar.
One Stock to Buy:
StoneX (SNEX)
One-Month Return: +19.3%
Originally known as INTL FCStone until its 2020 rebranding, StoneX Group (NASDAQ: SNEX) provides a global financial services network connecting companies, traders, and investors to markets through clearing, execution, and advisory services.
Why Is SNEX a Good Business?
- Annual revenue growth of 44.3% over the last two years was superb and indicates its market share increased during this cycle
- Earnings per share grew by 29.6% annually over the last two years, massively outpacing its peers
- Balance sheet strength has increased this cycle as its 16.9% annual tangible book value per share growth over the last five years was exceptional
StoneX is trading at $131.49 per share, or 3.5x forward P/B. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
Stocks We Like Even More
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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
