1 Surging Stock with Solid Fundamentals and 2 We Find Risky
The stocks in this article are all trading near their 52-week highs. This strength often reflects positive developments such as new product launches, favorable industry trends, or improved financial performance.
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 is one stock with lasting competitive advantages and two that may correct.
Two Stocks to Sell:
MSC Industrial (MSM)
One-Month Return: +8.6%
Founded in NYC’s Little Italy, MSC Industrial Direct (NYSE:MSM) provides industrial supplies and equipment, offering vast and reliable selection for customers such as contractors
Why Are We Bearish on MSM?
- Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last two years
- Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term
- Eroding returns on capital suggest its historical profit centers are aging
At $129.51 per share, MSC Industrial trades at 24.4x forward P/E. Check out our free in-depth research report to learn more about why MSM doesn’t pass our bar.
Ibotta (IBTA)
One-Month Return: +4.2%
Originally launched as a way to make grocery shopping more rewarding for budget-conscious consumers, Ibotta (NYSE:IBTA) is a mobile shopping app that allows consumers to earn cash back on everyday purchases by completing tasks and submitting receipts.
Why Does IBTA Give Us Pause?
- Sales tumbled by 1.3% annually over the last two years, showing market trends are working against it during this cycle
- Subscale operations are evident in its revenue base of $343.2 million, meaning it has fewer distribution channels than its larger rivals
- Earnings per share have contracted by 22.3% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
Ibotta is trading at $44.20 per share, or 26.8x forward P/E. Dive into our free research report to see why there are better opportunities than IBTA.
One Stock to Watch:
Clean Harbors (CLH)
One-Month Return: -1.8%
Established in 1980, Clean Harbors (NYSE:CLH) provides environmental and industrial services like hazardous and non-hazardous waste disposal and emergency spill cleanups.
Why Are We Positive on CLH?
- Market share has increased this cycle as its 13.5% annual revenue growth over the last five years was exceptional
- Share buybacks catapulted its annual earnings per share growth to 21.6%, which outperformed its revenue gains over the last five years
- Free cash flow margin jumped by 5.9 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
Clean Harbors’s stock price of $317.03 implies a valuation ratio of 30.9x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.