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.
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 that may correct.
Two Momentum Stocks to Sell:
Genco (GNK)
One-Month Return: +13.8%
Headquartered in NYC, Genco (NYSE:GNK) is a shipping company that transports dry bulk cargo along worldwide maritime routes.
Why Do We Steer Clear of GNK?
- Sluggish trends in its owned vessels suggest customers aren’t adopting its solutions as quickly as the company hoped
- Earnings per share have contracted by 45.6% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 6.5 percentage points
Genco’s stock price of $14.56 implies a valuation ratio of 22.2x forward P/E. Check out our free in-depth research report to learn more about why GNK doesn’t pass our bar.
SolarEdge (SEDG)
One-Month Return: +30.4%
Established in 2006, SolarEdge (NASDAQ: SEDG) creates advanced systems to improve the efficiency of solar panels.
Why Should You Sell SEDG?
- Demand for its offerings was relatively low as its number of megawatts shipped has underwhelmed
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
- Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders
SolarEdge is trading at $18.15 per share, or 0.9x forward price-to-sales. To fully understand why you should be careful with SEDG, check out our full research report (it’s free).
One Momentum Stock to Buy:
Airbnb (ABNB)
One-Month Return: +21.7%
Founded by Brian Chesky and Joe Gebbia in their San Francisco apartment, Airbnb (NASDAQ:ABNB) is the world’s largest online marketplace for lodging, primarily homestays.
Why Will ABNB Beat the Market?
- Has the opportunity to boost monetization through new features and premium offerings as its nights and experiences booked have grown by 10.4% annually over the last two years
- Earnings per share have massively outperformed its peers over the last three years, increasing by 49.4% annually
- Strong free cash flow margin of 39.7% enables it to reinvest or return capital consistently
At $137.83 per share, Airbnb trades at 20.5x forward EV/EBITDA. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years.
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.