1 Mooning Industrials Stock with Impressive Fundamentals and 2 That Underwhelm
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.
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 is one stock with lasting competitive advantages and two that may correct.
Two Momentum Stocks to Sell:
REV Group (REVG)
One-Month Return: +19%
Offering the first full-electric North American fire truck, REV (NYSE:REVG) manufactures and sells specialty vehicles.
Why Do We Think Twice About REVG?
- Sales pipeline suggests its future revenue growth may not meet our standards as its average backlog growth of 3.7% for the past two years was weak
- Competitive supply chain dynamics and steep production costs are reflected in its low gross margin of 12.5%
- Operating margin of 3.9% falls short of the industry average, and the smaller profit dollars make it harder to react to unexpected market developments
At $60.43 per share, REV Group trades at 16x forward P/E. Check out our free in-depth research report to learn more about why REVG doesn’t pass our bar.
Schneider (SNDR)
One-Month Return: +29.8%
Employing thousands of drivers across the country to make deliveries, Schneider (NYSE:SNDR) makes full truckload and intermodal deliveries regionally and across borders.
Why Do We Steer Clear of SNDR?
- Flat sales over the last two years suggest it must find different ways to grow during this cycle
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 10.2% annually while its revenue grew
- Waning returns on capital imply its previous profit engines are losing steam
Schneider is trading at $26.96 per share, or 28.3x forward P/E. Read our free research report to see why you should think twice about including SNDR in your portfolio.
One Momentum Stock to Buy:
Dycom (DY)
One-Month Return: +5%
Working alongside some of the most popular mobile carriers in the world, Dycom (NYSE:DY) builds and maintains telecommunications infrastructure.
Why Do We Love DY?
- Impressive 11.8% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Operating margin expanded by 5.9 percentage points over the last five years as it scaled and became more efficient
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 33.3% exceeded its revenue gains over the last five years
Dycom’s stock price of $341.40 implies a valuation ratio of 27.9x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in 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 Exlservice (+354% 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.