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. Keeping that in mind, here is one stock with the fundamentals to back up its performance and two that may correct.
Two Stocks to Sell:
REV Group (REVG)
One-Month Return: +15.3%
Offering the first full-electric North American fire truck, REV (NYSE: REVG) manufactures and sells specialty vehicles.
Why Are We Hesitant About REVG?
- Backlog growth averaged a weak 3.7% over the past two years, suggesting it may need to tweak its product roadmap or go-to-market strategy
- Competitive supply chain dynamics and steep production costs are reflected in its low gross margin of 12.5%
- Operating margin of 3.9% falls short of the industry average, and the smaller profit dollars make it harder to react to unexpected market developments
REV Group’s stock price of $68.27 implies a valuation ratio of 18x forward P/E. To fully understand why you should be careful with REVG, check out our full research report (it’s free).
Regeneron (REGN)
One-Month Return: +2.1%
Founded by scientists who wanted to build a company where science could thrive, Regeneron Pharmaceuticals (NASDAQ: REGN) develops and commercializes medicines for serious diseases, with key products treating eye conditions, allergic diseases, cancer, and other disorders.
Why Does REGN Worry Us?
- Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 4.3% over the last two years was below our standards for the healthcare sector
- Efficiency has decreased over the last five years as its adjusted operating margin fell by 23.8 percentage points
- Eroding returns on capital suggest its historical profit centers are aging
Regeneron is trading at $768.65 per share, or 17.6x forward P/E. Dive into our free research report to see why there are better opportunities than REGN.
One Stock to Watch:
Flowserve (FLS)
One-Month Return: +2.7%
Manufacturing the largest pump ever built for nuclear power generation, Flowserve (NYSE: FLS) manufactures and sells flow control equipment for various industries.
Why Are We Positive On FLS?
- Operating profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
- Incremental sales over the last two years have been highly profitable as its earnings per share increased by 23.6% annually, topping its revenue gains
- Free cash flow margin expanded by 5 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
At $73.74 per share, Flowserve trades at 18.9x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth 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.
