Each stock in this article is trading near its 52-week high. These elevated prices usually indicate some degree of investor confidence, business improvements, or favorable market conditions.
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 we think lives up to the hype and two best left ignored.
Two Stocks to Sell:
Disney (DIS)
One-Month Return: +7.4%
Founded by brothers Walt and Roy, Disney (NYSE:DIS) is a multinational entertainment conglomerate, renowned for its theme parks, movies, television networks, and merchandise.
Why Do We Think DIS Will Underperform?
- Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 3.7% over the last five years was below our standards for the consumer discretionary sector
- Capital intensity will likely increase as its free cash flow margin is anticipated to drop by 5.3 percentage points over the next year
- Underwhelming 5.7% return on capital reflects management’s difficulties in finding profitable growth opportunities
Disney is trading at $113.73 per share, or 20.6x forward P/E. Check out our free in-depth research report to learn more about why DIS doesn’t pass our bar.
Abbott Laboratories (ABT)
One-Month Return: +0.3%
With roots dating back to 1888 when founder Dr. Wallace Abbott began producing precise, dosage-form medications, Abbott Laboratories (NYSE:ABT) develops and sells a diverse range of healthcare products including medical devices, diagnostics, nutrition products, and branded generic pharmaceuticals.
Why Are We Hesitant About ABT?
- Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 1% over the last two years was below our standards for the healthcare sector
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- 4.7 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
At $133.58 per share, Abbott Laboratories trades at 25.1x forward P/E. Read our free research report to see why you should think twice about including ABT in your portfolio.
One Stock to Watch:
Intuit (INTU)
One-Month Return: +18.2%
Created in 1983 when founder Scott Cook watched his wife struggle to reconcile the family's checkbook, Intuit provides tax and accounting software for small and medium-sized businesses.
Why Could INTU Be a Winner?
- Software platform has product-market fit given the rapid recovery of its customer acquisition costs
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
Intuit’s stock price of $772.60 implies a valuation ratio of 10.6x forward price-to-sales. Is now the right time to buy? Find out in our full 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 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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free.