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 not so much.
Two Industrials Stocks to Sell:
Kratos (KTOS)
One-Month Return: +11.9%
Established with a commitment to supporting national security, Kratos (NASDAQ: KTOS) is a provider of advanced engineering, technology, and security solutions tailored for critical national security applications.
Why Does KTOS Worry Us?
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 6.7 percentage points
- Underwhelming 3.4% return on capital reflects management’s difficulties in finding profitable growth opportunities, and its shrinking returns suggest its past profit sources are losing steam
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
Kratos is trading at $76.92 per share, or 129.6x forward P/E. Check out our free in-depth research report to learn more about why KTOS doesn’t pass our bar.
Ford (F)
One-Month Return: +2%
Established to make automobiles accessible to a broader segment of the population, Ford (NYSE: F) designs, manufactures, and sells a variety of automobiles, trucks, and electric vehicles.
Why Do We Steer Clear of F?
- Flat vehicles sold over the past two years show it’s struggled to increase its sales volumes and had to rely on price increases
- Waning returns on capital imply its previous profit engines are losing steam
- High net-debt-to-EBITDA ratio of 9× could force the company to raise capital at unfavorable terms if market conditions deteriorate
At $11.69 per share, Ford trades at 9x forward P/E. Dive into our free research report to see why there are better opportunities than F.
One Industrials Stock to Watch:
Granite Construction (GVA)
One-Month Return: -2.2%
Having played a role in the construction of the Hoover Dam, Granite Construction (NYSE: GVA) is a provider of infrastructure solutions for roads, bridges, and other projects.
Why Are We Fans of GVA?
- Impressive 11.9% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Additional sales over the last two years increased its profitability as the 42% annual growth in its earnings per share outpaced its revenue
- Improving returns on capital suggest its past investments are beginning to deliver value
Granite Construction’s stock price of $107.60 implies a valuation ratio of 17.5x forward EV-to-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
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 5 Strong Momentum 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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