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 are two stocks with the fundamentals to back up their performance and one not so much.
One Stock to Sell:
Applied Industrial (AIT)
One-Month Return: +1.4%
Formerly called The Ohio Ball Bearing Company, Applied Industrial (NYSE: AIT) distributes industrial products–everything from power tools to industrial valves–and services to a wide variety of industries.
Why Does AIT Give Us Pause?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 5.2%
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 5% annually
Applied Industrial is trading at $281.30 per share, or 25.3x forward P/E. To fully understand why you should be careful with AIT, check out our full research report (it’s free).
Two Stocks to Watch:
Installed Building Products (IBP)
One-Month Return: +7.6%
Founded in 1977, Installed Building Products (NYSE: IBP) is a company specializing in the installation of insulation, waterproofing, and other complementary building products for residential and commercial construction.
Why Could IBP Be a Winner?
- Annual revenue growth of 13% over the past five years was outstanding, reflecting market share gains this cycle
- Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- ROIC punches in at 21.5%, illustrating management’s expertise in identifying profitable investments, and its returns are growing as it capitalizes on even better market opportunities
Installed Building Products’s stock price of $322.98 implies a valuation ratio of 30.4x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
UMB Financial (UMBF)
One-Month Return: +4.6%
With roots dating back to 1913 and a name derived from "United Missouri Bank," UMB Financial (NASDAQ: UMBF) is a financial holding company that provides banking, asset management, and fund services to commercial, institutional, and individual customers.
Why Do We Like UMBF?
- Impressive 20.6% annual net interest income growth over the last five years indicates it’s winning market share this cycle
- Net interest margin jumped by 55.4 basis points (100 basis points = 1 percentage point) over the last two years, giving the firm more resources to pursue growth initiatives
- Efficiency ratio improvement of -3.1 percentage points is projected for next year as the firm achieves greater operating leverage
At $126.10 per share, UMB Financial trades at 1.2x forward P/B. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
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.
