The stocks featured in this article are seeing some big returns. Over the past month, they’ve outpaced the market due to new product launches, positive news, or even a dedicated social media following.
While momentum can be a leading indicator, it has burned many investors as it doesn’t always correlate with long-term success. Keeping that in mind, here is one stock with lasting competitive advantages and two best left ignored.
Two Momentum Stocks to Sell:
Lincoln Educational (LINC)
One-Month Return: +31.2%
Established in 1946, Lincoln Educational (NASDAQ: LINC) is a provider of specialized technical training in the United States, offering career-oriented programs to provide practical skills required in the workforce.
Why Are We Hesitant About LINC?
- Sluggish trends in its enrolled students suggest customers aren’t adopting its solutions as quickly as the company hoped
- Cash-burning history makes us doubt the long-term viability of its business model
- Diminishing returns on capital suggest its earlier profit pools are drying up
Lincoln Educational is trading at $22.57 per share, or 10.8x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than LINC.
Tandem Diabetes (TNDM)
One-Month Return: +33.3%
With technology that automatically adjusts insulin delivery based on continuous glucose monitoring data, Tandem Diabetes Care (NASDAQ: TNDM) develops and manufactures automated insulin delivery systems that help people with diabetes manage their blood glucose levels.
Why Do We Think TNDM Will Underperform?
- Weak pump shipments over the past two years imply it may need to invest in improvements to get back on track
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 47.1% annually
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
Tandem Diabetes’s stock price of $23 implies a valuation ratio of 38.8x forward EV-to-EBITDA. To fully understand why you should be careful with TNDM, check out our full research report (it’s free).
One Momentum Stock to Buy:
Cloudflare (NET)
One-Month Return: +39.5%
Founded by two grad students of Harvard Business School, Cloudflare (NYSE: NET) is a software-as-a-service platform that helps improve the security, reliability, and loading times of internet applications.
Why Should You Buy NET?
- Billings have averaged 27.9% growth over the last year, showing it’s securing new contracts that could potentially increase in value over time
- Revenue outlook for the upcoming 12 months is outstanding and shows it’s on track to gain market share
- Software platform has product-market fit given the rapid recovery of its customer acquisition costs
At $152.78 per share, Cloudflare trades at 23.8x forward price-to-sales. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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.
