The stocks featured in this article are seeing some big returns. Over the past month, they’ve outpaced the market due to some combination of positive news, upbeat results, or supportive macro developments. As such, investors are taking notice and bidding up shares.
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 we think lives up to the hype and two best left ignored.
Two Momentum Stocks to Sell:
IQVIA (IQV)
One-Month Return: +26.8%
Created from the 2016 merger of Quintiles (a clinical research organization) and IMS Health (a healthcare data specialist), IQVIA (NYSE:IQV) provides clinical research services, data analytics, and technology solutions to help pharmaceutical companies develop and market medications more effectively.
Why Are We Wary of IQV?
- Annual sales growth of 5.6% over the last five years lagged behind its healthcare peers as its large revenue base made it difficult to generate incremental demand
- Static adjusted operating margin over the last two years shows it couldn’t become more efficient
- Free cash flow margin didn’t grow over the last five years
At $244.97 per share, IQVIA trades at 17.8x forward P/E. Read our free research report to see why you should think twice about including IQV in your portfolio.
HP (HPQ)
One-Month Return: +29.1%
Born from the legendary Silicon Valley garage startup founded by Bill Hewlett and Dave Packard in 1939, HP (NYSE:HPQ) designs and sells personal computers, printers, and related technology products and services to consumers, businesses, and enterprises worldwide.
Why Are We Out on HPQ?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 1.2% annually over the last five years
- Demand will likely fall over the next 12 months as Wall Street expects flat revenue
- Incremental sales over the last two years were less profitable as its earnings per share were flat while its revenue grew
HP’s stock price of $28.33 implies a valuation ratio of 10.3x forward P/E. If you’re considering HPQ for your portfolio, see our FREE research report to learn more.
One Momentum Stock to Buy:
SM Energy (SM)
One-Month Return: +21%
Operating across three key regions with over 328,000 net acres under its control, SM Energy (NYSE:SM) explores for, develops, and produces oil, natural gas, and natural gas liquids primarily from shale formations in Texas and Utah.
Why Will SM Beat the Market?
- Annual revenue growth of 25.5% over the past five years was outstanding, reflecting market share gains this cycle
- Highly-profitable operating model results in strong unit economics and a best-in-class gross margin of 87.2%
- EBITDA margin improvement of 18 percentage points over the last five years demonstrates its ability to scale efficiently
SM Energy is trading at $31.58 per share, or 4.2x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.