The stocks featured in this article have all approached their 52-week highs. When these price levels hit, it typically signals strong business execution, positive market sentiment, or significant industry tailwinds.
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 lasting competitive advantages and two that may correct.
Two Stocks to Sell:
Mercury General (MCY)
One-Month Return: +7.8%
Founded in 1961 and maintaining a network of over 6,300 independent agents across the country, Mercury General (NYSE: MCY) is an insurance company that primarily sells automobile insurance policies through independent agents in 11 states, with a strong focus on California.
Why Is MCY Not Exciting?
- Costs have risen faster than its revenue over the last four years, causing its combined ratio to worsen by 7.5 percentage points
- Muted 1.6% annual book value per share growth over the last five years shows its capital generation lagged behind its insurance peers
- Low return on equity reflects management’s struggle to allocate funds effectively
At $79.31 per share, Mercury General trades at 2.1x forward P/B. Read our free research report to see why you should think twice about including MCY in your portfolio.
Republic Bancorp (RBCAA)
One-Month Return: +6.9%
With roots dating back to 1974 and operating across multiple states including Kentucky, Indiana, Florida, Ohio, and Tennessee, Republic Bancorp (NASDAQGS:RBCA.A) is a Kentucky-based financial holding company that operates a bank offering traditional banking, mortgage services, and specialized financial products.
Why Are We Cautious About RBCAA?
- Estimated net interest income growth of 2% for the next 12 months implies demand will slow from its five-year trend
- Muted 10% annual tangible book value per share growth over the last two years shows its capital generation lagged behind its banking peers
- Estimated tangible book value per share growth of 7.3% for the next 12 months implies profitability will slow from its two-year trend
Republic Bancorp is trading at $77.31 per share, or 1.4x forward P/B. If you’re considering RBCAA for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
United Therapeutics (UTHR)
One-Month Return: +31.7%
Founded by a mother seeking treatment for her daughter's pulmonary arterial hypertension, United Therapeutics (NASDAQ: UTHR) develops and commercializes medications for chronic lung diseases and other life-threatening conditions, with a focus on pulmonary hypertension treatments.
Why Is UTHR a Good Business?
- Annual revenue growth of 20.7% over the last two years was superb and indicates its market share increased during this cycle
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its recently improved profitability means it has even more resources to invest or distribute
- Returns on capital are climbing as management makes more lucrative bets
United Therapeutics’s stock price of $412.41 implies a valuation ratio of 12.9x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - 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 183% over the last five years (as of March 31st 2025).
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-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
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