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.
While momentum can be a leading indicator, it has burned many investors as it doesn’t always correlate with long-term success. All that said, here is one stock with the fundamentals to back up its performance and two that may correct.
Two Momentum Stocks to Sell:
Stratasys (SSYS)
One-Month Return: +21%
Born from the Founder’s idea of making a toy frog with a glue gun, Stratasys (NASDAQ:SSYS) offers 3D printers and related materials, software, and services to many industries.
Why Is SSYS Risky?
- Annual sales declines of 5.6% for the past two years show its products and services struggled to connect with the market during this cycle
- Historical operating margin losses point to an inefficient cost structure
- Free cash flow margin shrank by 6.1 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
At $11.20 per share, Stratasys trades at 55.9x forward P/E. To fully understand why you should be careful with SSYS, check out our full research report (it’s free).
Meritage Homes (MTH)
One-Month Return: +16%
Originally founded in 1985 in Arizona as Monterey Homes, Meritage Homes (NYSE:MTH) is a homebuilder specializing in designing and constructing energy-efficient and single-family homes in the US.
Why Do We Think MTH Will Underperform?
- Demand cratered as it couldn’t win new orders over the past two years, leading to an average 34.4% decline in its backlog
- Earnings per share decreased by more than its revenue over the last two years, showing each sale was less profitable
- Waning returns on capital imply its previous profit engines are losing steam
Meritage Homes’s stock price of $76.04 implies a valuation ratio of 11.2x forward P/E. Dive into our free research report to see why there are better opportunities than MTH.
One Momentum Stock to Watch:
agilon health (AGL)
One-Month Return: +29%
Transforming how doctors care for seniors by shifting financial incentives from volume to outcomes, agilon health (NYSE:AGL) provides a platform that helps primary care physicians transition to value-based care models for Medicare patients through long-term partnerships and global capitation arrangements.
Why Could AGL Be a Winner?
- Annual revenue growth of 37.2% over the past five years was outstanding, reflecting market share gains this cycle
- Customer trends over the past two years show it’s maintaining a steady flow of new contracts that can potentially increase in value over time
- Cash burn has decreased over the last five years, showing the company is becoming a more self-sustaining business
agilon health is trading at $0.93 per share, or 0.1x forward price-to-sales. Is now the right time to buy? See for yourself in our comprehensive 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 Growth Stocks for this month. 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 Exlservice (+354% five-year return). Find your next big winner with StockStory today.