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 are two stocks with the fundamentals to back up their performance and one not so much.
One Momentum Stock to Sell:
MasterCraft (MCFT)
One-Month Return: +11.2%
Started by a waterskiing instructor, MasterCraft (NASDAQ: MCFT) specializes in designing, manufacturing, and selling sport boats.
Why Do We Avoid MCFT?
- Annual sales declines of 6.7% for the past five years show its products and services struggled to connect with the market
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 7% for the last two years
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
MasterCraft is trading at $24.42 per share, or 13.5x forward P/E. Read our free research report to see why you should think twice about including MCFT in your portfolio.
Two Momentum Stocks to Watch:
Micron (MU)
One-Month Return: +70.5%
Founded in the basement of a Boise, Idaho dental office in 1978, Micron (NASDAQ: MU) is a leading provider of memory chips used in thousands of devices across mobile, data centers, industrial, consumer, and automotive markets.
Why Will MU Outperform?
- Market share has increased this cycle as its 78.2% annual revenue growth over the last two years was exceptional
- Excellent operating margin of 38.3% highlights the efficiency of its business model, and it turbocharged its profits by achieving some fixed cost leverage
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 43% over the last five years outstripped its revenue performance
At $778.00 per share, Micron trades at 8.7x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Flywire (FLYW)
One-Month Return: +25.8%
Initially created to solve the challenges of international student tuition payments, Flywire (NASDAQ: FLYW) provides specialized payment processing and software solutions that help educational institutions, healthcare systems, travel companies, and businesses manage complex payments.
Why Are We Fans of FLYW?
- Billings growth has averaged 36.5% over the last year, indicating a healthy pipeline of new contracts that should drive future revenue increases
- Operating margin of 5% shows it’s one of the more profitable companies in the software space, and its profits increased over the last year as it scaled
- Free cash flow generation is better than most peers and allows it to explore new investment opportunities
Flywire’s stock price of $16.33 implies a valuation ratio of 2.6x forward price-to-sales. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
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 (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
