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.
But not every company with momentum is a long-term winner, and plenty of investors have lost money betting on short-term fads. 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:
DraftKings (DKNG)
One-Month Return: +3.2%
Getting its start in daily fantasy sports, DraftKings (NASDAQ: DKNG) is a digital sports entertainment and gaming company.
Why Are We Wary of DKNG?
- Sluggish trends in its monthly unique players suggest customers aren’t adopting its solutions as quickly as the company hoped
- Persistent operating margin losses suggest the business manages its expenses poorly
- Projected 1.1 percentage point decline in its free cash flow margin next year reflects the company’s plans to increase its investments to defend its market position
DraftKings is trading at $34.97 per share, or 30.7x forward P/E. To fully understand why you should be careful with DKNG, check out our full research report (it’s free for active Edge members).
Two Momentum Stocks to Buy:
Carlyle (CG)
One-Month Return: +13%
Founded in 1987 with just $5 million in capital and named after the iconic New York hotel where the founders first met, The Carlyle Group (NASDAQ: CG) is a global investment firm that raises, manages, and deploys capital across private equity, credit, and investment solutions.
Why Will CG Outperform?
- Decent 10.9% annual revenue growth over the last five years beat most of its peers, showing customers find value in its products and services
- Efficiency rose over the last two years as its fee-related earnings increased by 23.6% per year
- Incremental sales over the last two years have been highly profitable as its earnings per share increased by 23.9% annually, topping its revenue gains
Carlyle’s stock price of $61.07 implies a valuation ratio of 13.3x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
LendingClub (LC)
One-Month Return: +8.7%
Pioneering peer-to-peer lending in the US before evolving into a digital bank, LendingClub (NYSE: LC) operates a marketplace that connects borrowers with lenders, offering personal loans, auto refinancing, and banking services.
Why Do We Love LC?
- Annual revenue growth of 24.7% over the last five years was superb and indicates its market share increased during this cycle
- Earnings per share grew by 38.3% annually over the last two years, massively outpacing its peers
At $19.49 per share, LendingClub trades at 13.4x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
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 6 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-small-cap company Comfort Systems (+782% 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.
