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. Keeping that in mind, here is one stock we think lives up to the hype and two not so much.
Two Stocks to Sell:
Warby Parker (WRBY)
One-Month Return: +12.7%
Founded in 2010, Warby Parker (NYSE: WRBY) designs, manufactures, and sells eyewear, including prescription glasses, sunglasses, and contact lenses, through its e-commerce platform and physical retail locations.
Why Do We Think Twice About WRBY?
- Smaller revenue base of $890.6 million means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
- Poor expense management has led to operating margin losses
- Negative returns on capital show that some of its growth strategies have backfired
Warby Parker is trading at $29.19 per share, or 55.5x forward P/E. Dive into our free research report to see why there are better opportunities than WRBY.
Oceaneering (OII)
One-Month Return: +4.5%
Deploying a fleet of 250 tethered underwater robots around the globe, Oceaneering International (NYSE: OII) provides remotely operated underwater vehicles and subsea equipment for offshore energy exploration.
Why Are We Out on OII?
- Flat sales over the last ten years suggest it must find different ways to grow during this cycle
- High extraction costs and unfavorable asset economics are reflected in its low gross margin of 17.4%
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
At $38.76 per share, Oceaneering trades at 1.3x forward price-to-sales. Read our free research report to see why you should think twice about including OII in your portfolio.
One Stock to Buy:
Lam Research (LRCX)
One-Month Return: +5.8%
Founded in 1980 by David Lam, the man who pioneered semiconductor etching technology, Lam Research (NASDAQ: LRCX) is one of the leading providers of wafer fabrication equipment used to make semiconductors.
Why Will LRCX Outperform?
- Annual revenue growth of 23.4% over the last two years was superb and indicates its market share increased during this cycle
- Excellent operating margin of 32.8% highlights the efficiency of its business model, and its rise over the last five years was fueled by some leverage on its fixed costs
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures
Lam Research’s stock price of $278.50 implies a valuation ratio of 38.1x forward P/E. Is now the right time to buy? See for yourself in our full 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 (+1,326% 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.
