1 Surging Stock with Exciting Potential and 2 That Underwhelm
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 not so much.
Two Momentum Stocks to Sell:
TEGNA (TGNA)
One-Month Return: +23.2%
Spun out of Gannett in 2015, TEGNA (NYSE:TGNA) is a media company operating a network of television stations and digital platforms, focusing on local news and community content.
Why Do We Avoid TGNA?
Sales tumbled by 2.5% annually over the last two years, showing consumer trends are working against its favor
Sales are projected to tank by 8.5% over the next 12 months as its demand continues evaporating
Projected 4.5 percentage point decline in its free cash flow margin next year reflects the company's plans to increase its investments to defend its market position
At $20.60 per share, TEGNA trades at 11x forward P/E. To fully understand why you should be careful with TGNA, check out our full research report (it's free).
Simpson (SSD)
One-Month Return: +17.5%
Aiming to build safer and stronger buildings, Simpson (NYSE:SSD) designs and manufactures structural connectors, anchors, and other construction products.
Why Are We Wary of SSD?
2.6% annual revenue growth over the last two years was slower than its industrials peers
Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 10.7 percentage points
Shrinking returns on capital suggest that increasing competition is eating into the company's profitability
Simpson's stock price of $187.04 implies a valuation ratio of 22.1x forward P/E. If you're considering SSD for your portfolio, see our FREE research report to learn more.
One Momentum Stock to Watch:
Montrose (MEG)
One-Month Return: +25.8%
Founded to protect a tree-lined two-lane road, Montrose (NYSE:MEG) provides air quality monitoring, environmental laboratory testing, compliance, and environmental consulting services.
Why Are We Positive On MEG?
Annual revenue growth of 18% over the past two years was outstanding, reflecting market share gains this cycle
Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 132% outpaced its revenue gains
Free cash flow margin jumped by 12.3 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
Montrose is trading at $27.61 per share, or 20.2x forward EV-to-EBITDA. Is now the right time to buy? Find out in our full research report, it's free.
Stocks We Like Even More
Trump's April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 9 Market-Beating Stocks. 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-small-cap company Comfort Systems (+782% 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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