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1 Surging Stock with Solid Fundamentals and 2 That Underwhelm

CCL Cover Image

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. All that said, here is one stock with the fundamentals to back up its performance and two that may correct.

Two Stocks to Sell:

Carnival (CCL)

One-Month Return: -1%

Boasting outrageous amenities like a planetarium on board its ships, Carnival (NYSE:CCL) is one of the world's largest leisure travel companies and a prominent player in the cruise industry.

Why Do We Think Twice About CCL?

  1. Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 9% for the last five years
  2. Estimated sales growth of 4.1% for the next 12 months implies demand will slow from its two-year trend
  3. Negative returns on capital show management lost money while trying to expand the business

At $29.02 per share, Carnival trades at 14.5x forward P/E. Check out our free in-depth research report to learn more about why CCL doesn’t pass our bar.

Gorman-Rupp (GRC)

One-Month Return: +7.8%

Powering fluid dynamics since 1934, Gorman-Rupp (NYSE:GRC) has evolved from its Ohio origins into a global manufacturer and seller of pumps and pump systems.

Why Does GRC Fall Short?

  1. 3.3% annual revenue growth over the last two years was slower than its industrials peers
  2. Anticipated sales growth of 3.7% for the next year implies demand will be shaky
  3. Free cash flow margin dropped by 4.7 percentage points over the last five years, implying the company became more capital intensive as competition picked up

Gorman-Rupp is trading at $40.85 per share, or 18.3x forward P/E. Dive into our free research report to see why there are better opportunities than GRC.

One Stock to Watch:

RBC Bearings (RBC)

One-Month Return: +3.3%

With a Guinness World Record for engineering the largest spherical plain bearing, RBC Bearings (NYSE:RBC) is a manufacturer of bearings and related components for the aerospace & defense, industrial, and transportation industries.

Why Is RBC Interesting?

  1. Annual revenue growth of 18.9% over the past five years was outstanding, reflecting market share gains this cycle
  2. Demand for the next 12 months is expected to accelerate above its two-year trend as Wall Street forecasts robust revenue growth of 14.7%
  3. Excellent operating margin of 20.2% highlights the efficiency of its business model, and it turbocharged its profits by achieving some fixed cost leverage

RBC Bearings’s stock price of $399.80 implies a valuation ratio of 33.7x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.

Stocks We Like Even More

Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.

Take advantage of the rebound by checking 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 183% over the last five years (as of March 31st 2025).

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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free.

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