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.
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 is one stock with the fundamentals to back up its performance and two not so much.
Two Momentum Stocks to Sell:
Polaris (PII)
One-Month Return: +22.8%
Founded in 1954, Polaris (NYSE: PII) designs and manufactures high-performance off-road vehicles, snowmobiles, and motorcycles.
Why Are We Out on PII?
- Sales stagnated over the last five years and signal the need for new growth strategies
- Capital intensity will likely ramp up in the next year as its free cash flow margin is expected to contract by 3.2 percentage points
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
Polaris is trading at $66.32 per share, or 47.2x forward P/E. Dive into our free research report to see why there are better opportunities than PII.
Franklin Resources (BEN)
One-Month Return: +27.9%
Operating under the widely recognized Franklin Templeton brand since 1947, Franklin Resources (NYSE: BEN) is a global investment management organization that offers financial services and solutions to individuals, institutions, and wealth advisors worldwide.
Why Should You Sell BEN?
- 5.4% annual revenue growth over the last five years was slower than its financials peers
- Earnings per share fell by 1.6% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
- ROE of 8% reflects management’s challenges in identifying attractive investment opportunities
At $29.94 per share, Franklin Resources trades at 10.6x forward P/E. To fully understand why you should be careful with BEN, check out our full research report (it’s free).
One Momentum Stock to Watch:
GE Vernova (GEV)
One-Month Return: +18.6%
Born from the energy business of industrial giant General Electric in a 2023 spin-off, GE Vernova (NYSE: GEV) designs, manufactures, and services power generation equipment and grid technologies to help customers build more reliable and sustainable electric systems.
Why Does GEV Catch Our Eye?
- Market share is on track to rise over the next 12 months as its 20.4% projected revenue growth implies demand will accelerate from its two-year trend
- Earnings growth has trumped its peers over the last one years as its EPS has compounded at 223% annually
- Free cash flow margin increased by 41.9 percentage points over the last four years, giving the company more capital to invest or return to shareholders
GE Vernova’s stock price of $1,064 implies a valuation ratio of 59x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren't just high-quality businesses. Something is happening with them right now. Elite fundamentals meeting near-term momentum - both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week's Strong Momentum stocks - FREE. Get Our Strong Momentum 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.
