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.
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 are two stocks with lasting competitive advantages and one that may correct.
One Momentum Stock to Sell:
Carnival (CCL)
One-Month Return: +21%
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 Pass on CCL?
- Number of passenger cruise days has disappointed over the past two years, indicating weak demand for its offerings
- Poor free cash flow margin of 7.6% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
- Negative returns on capital show that some of its growth strategies have backfired
At $31.49 per share, Carnival trades at 12.3x forward P/E. Check out our free in-depth research report to learn more about why CCL doesn’t pass our bar.
Two Momentum Stocks to Buy:
Abercrombie and Fitch (ANF)
One-Month Return: +29.4%
Founded as an outdoor and sporting brand, Abercrombie & Fitch (NYSE: ANF) evolved to become a specialty retailer that sells its own brand of fashionable clothing to young adults.
Why Is ANF a Top Pick?
- Brick-and-mortar locations are witnessing elevated demand as their same-store sales growth averaged 11.9% over the past two years
- Collection of products is difficult to replicate at scale and results in a best-in-class gross margin of 63.3%
- Performance over the past three years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
Abercrombie and Fitch is trading at $124.22 per share, or 12.2x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
FTAI Aviation (FTAI)
One-Month Return: +25.8%
With a focus on the CFM56 engine that powers Boeing and Airbus’s planes, FTAI Aviation (NASDAQ: FTAI) sells, leases, maintains, and repairs aircraft engines.
Why Will FTAI Outperform?
- Impressive 43.9% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 82.4% over the last two years outstripped its revenue performance
- Cash-burning tendencies have improved over the last five years, showing it could become financially independent one day
FTAI Aviation’s stock price of $223.19 implies a valuation ratio of 34.2x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free for active Edge members.
Stocks We Like Even More
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in 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 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today.
