Great things are happening to the stocks in this article. They’re all outperforming the market over the last month because of positive catalysts such as a new product line, constructive news flow, or even a loyal Reddit fanbase.
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 lasting competitive advantages and two best left ignored.
Two Momentum Stocks to Sell:
Reynolds (REYN)
One-Month Return: +25.6%
Best known for its aluminum foil, Reynolds (NASDAQ: REYN) is a household products company whose products focus on food storage, cooking, and waste.
Why Should You Sell REYN?
- Flat unit sales over the past two years imply it may need to invest in product improvements to get back on track
- Estimated sales for the next 12 months are flat and imply a softer demand environment
- Gross margin of 25.4% is below its competitors, leaving less money to invest in areas like marketing and production facilities
Reynolds is trading at $26.82 per share, or 16.9x forward P/E. Check out our free in-depth research report to learn more about why REYN doesn’t pass our bar.
Payoneer (PAYO)
One-Month Return: +31%
Founded during the early days of global e-commerce in 2005 to solve international payment challenges, Payoneer (NASDAQ: PAYO) provides financial technology services that enable small and medium-sized businesses to send and receive payments globally across borders.
Why Does PAYO Worry Us?
- Incremental sales over the last two years were less profitable as its 4.8% annual earnings per share growth lagged its revenue gains
- ROE of 7.3% reflects management’s challenges in identifying attractive investment opportunities
Payoneer’s stock price of $7.11 implies a valuation ratio of 25x forward P/E. Read our free research report to see why you should think twice about including PAYO in your portfolio.
One Momentum Stock to Buy:
FuelCell Energy (FCEL)
One-Month Return: +73.3%
Founded in 1969, FuelCell Energy (NASDAQ: FCEL) is a leading manufacturer and developer of carbonate fuel cell technology for stationary power generation.
Why Should You Buy FCEL?
- Annual revenue growth of 38.8% over the last two years was superb and indicates its market share increased during this cycle
- Earnings per share grew by 40.6% annually over the last two years, massively outpacing its peers
- Negative free cash flow margin has improved over the last five years, showing the company is one step closer to financial self-sufficiency
At $36.92 per share, FuelCell Energy trades at 7.6x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
