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.
But not every company with momentum is a long-term winner, and plenty of investors have lost money betting on short-term fads. All that said, here is one stock with the fundamentals to back up its performance and two not so much.
Two Stocks to Sell:
Verizon (VZ)
One-Month Return: -4.8%
Formed in 1984 as Bell Atlantic after the breakup of Bell System into seven companies, Verizon (NYSE: VZ) is a telecom giant providing a range of communications and internet services.
Why Do We Steer Clear of VZ?
- Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 1.5% for the last five years
- Free cash flow margin is not anticipated to grow over the next year
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
Verizon is trading at $48.05 per share, or 9.9x forward P/E. Check out our free in-depth research report to learn more about why VZ doesn’t pass our bar.
Tenaris (TEN)
One-Month Return: +6.2%
Operating industrial facilities across the Americas, Europe, Middle East, and Asia, Tenaris (NYSE: TEN) manufactures seamless and welded steel pipes used in oil and gas drilling and transportation.
Why Does TEN Worry Us?
- Sales trends were unexciting over the last five years as its 4.4% annual growth was below the typical energy upstream and integrated energy company
- Smaller revenue base of $798.7 million means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
Tenaris’s stock price of $39.41 implies a valuation ratio of 5x forward P/E. Dive into our free research report to see why there are better opportunities than TEN.
One Stock to Watch:
FirstCash (FCFS)
One-Month Return: +1.2%
Offering a financial lifeline to the unbanked and credit-constrained since 1988, FirstCash (NASDAQ: FCFS) operates pawn stores across the U.S. and Latin America while also providing retail point-of-sale payment solutions for credit-constrained consumers.
Why Should FCFS Be on Your Watchlist?
- Annual revenue growth of 17.5% over the past five years was outstanding, reflecting market share gains this cycle
- Additional sales over the last five years increased its profitability as the 23.8% annual growth in its earnings per share outpaced its revenue
- ROE of 12.6% shows management can invest its resources competently
At $198.54 per share, FirstCash trades at 18.6x 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
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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 Kadant (+351% five-year return). Find your next big winner with StockStory today.
