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 not so much.
Two Momentum Stocks to Sell:
DaVita (DVA)
One-Month Return: +29.1%
With over 2,600 dialysis centers across the United States and a presence in 13 countries, DaVita (NYSE: DVA) operates a network of dialysis centers providing treatment and care for patients with chronic kidney disease and end-stage kidney disease.
Why Does DVA Worry Us?
- Flat treatments over the past two years imply it may need to invest in improvements to get back on track
- Estimated sales growth of 2.6% for the next 12 months implies demand will slow from its two-year trend
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 1.9 percentage points
DaVita is trading at $192.73 per share, or 12.6x forward P/E. Dive into our free research report to see why there are better opportunities than DVA.
Insight Enterprises (NSIT)
One-Month Return: +14.8%
With over 35 years of IT expertise and partnerships with more than 8,000 technology providers, Insight Enterprises (NASDAQ: NSIT) provides end-to-end digital transformation solutions that help businesses modernize their IT infrastructure and maximize the value of technology.
Why Do We Think NSIT Will Underperform?
- Sales were flat over the last five years, indicating it’s failed to expand this cycle
- Estimated sales growth of 1.7% for the next 12 months is soft and implies weaker demand
- Earnings per share lagged its peers over the last two years as they only grew by 2.1% annually
Insight Enterprises’s stock price of $87.76 implies a valuation ratio of 7.7x forward P/E. If you’re considering NSIT for your portfolio, see our FREE research report to learn more.
One Momentum Stock to Buy:
Super Micro (SMCI)
One-Month Return: +7.3%
Founded in Silicon Valley in 1993 and known for its modular "building block" approach to server design, Super Micro Computer (NASDAQ: SMCI) designs and manufactures high-performance, energy-efficient server and storage systems for data centers, cloud computing, AI, and edge computing applications.
Why Are We Bullish on SMCI?
- Impressive 68.9% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Dominant market position is represented by its $33.7 billion in revenue and gives it fixed cost leverage when sales grow
- Earnings per share have massively outperformed its peers over the last five years, increasing by 57.5% annually
At $30.91 per share, Super Micro trades at 11x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it's flagging for this month - FREE. Get Our Top 5 Growth 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
