Exciting developments are taking place for the stocks in this article. They’ve all surged ahead of the broader market over the last month as catalysts such as new products and positive media coverage have propelled their returns.
However, not all companies with momentum are long-term winners, and many investors have lost money by following short-term trends. On that note, here is one stock with lasting competitive advantages and two not so much.
Two Momentum Stocks to Sell:
United Airlines (UAL)
One-Month Return: +17.9%
Founded in 1926, United Airlines Holdings (NASDAQ: UAL) operates a global airline network, providing passenger and cargo air transportation services across domestic and international routes.
Why Should You Dump UAL?
- Sluggish trends in its revenue passenger miles suggest customers aren’t adopting its solutions as quickly as the company hoped
- Responsiveness to unforeseen market trends is restricted due to its substandard operating margin profitability
- Free cash flow margin is forecasted to shrink by 5.5 percentage points in the coming year, suggesting the company will consume more capital to keep up with its competitors
At $135.35 per share, United Airlines trades at 14.9x forward P/E. To fully understand why you should be careful with UAL, check out our full research report (it’s free).
Amneal (AMRX)
One-Month Return: +29.5%
Founded in 2002 and growing into one of America's largest generic drug producers, Amneal Pharmaceuticals (NASDAQ: AMRX) develops, manufactures, and distributes generic medicines, specialty branded drugs, biosimilars, and injectable products for the U.S. healthcare market.
Why Do We Think Twice About AMRX?
- Estimated sales growth of 2.2% for the next 12 months implies demand will slow from its two-year trend
- Free cash flow margin has shown no improvement over the last five years
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
Amneal’s stock price of $17.05 implies a valuation ratio of 18.6x forward P/E. Dive into our free research report to see why there are better opportunities than AMRX.
One Momentum Stock to Watch:
Astec (ASTE)
One-Month Return: +21.3%
Inventing the first ever double-barrel hot-mix asphalt plant, Astec (NASDAQ: ASTE) provides machines and equipment for building roads, processing raw materials, and producing concrete.
Why Are We Fans of ASTE?
- Projected revenue growth of 11.3% for the next 12 months indicates demand will rise above its two-year trend
- Operating profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 18.5% over the last two years outstripped its revenue performance
Astec is trading at $61.07 per share, or 15.6x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
High-Quality Stocks for All Market Conditions
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 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.
