Each stock in this article is trading near its 52-week high. These elevated prices usually indicate some degree of investor confidence, business improvements, or favorable market conditions.
However, not all companies with momentum are long-term winners, and many investors have lost money by following short-term trends. All that said, here is one stock we think lives up to the hype and two not so much.
Two Stocks to Sell:
Commvault Systems (CVLT)
One-Month Return: +8.6%
Originally formed in 1988 as part of Bell Labs, Commvault (NASDAQ: CVLT) provides enterprise software used for data backup and recovery, cloud and infrastructure management, retention, and compliance.
Why Do We Think Twice About CVLT?
- Sales trends were unexciting over the last three years as its 9% annual growth was well below the typical software company
- Expenses have increased as a percentage of revenue over the last year as its operating margin fell by 1.6 percentage points
At $189 per share, Commvault Systems trades at 7.5x forward price-to-sales. If you’re considering CVLT for your portfolio, see our FREE research report to learn more.
Premier (PINC)
One-Month Return: +11.5%
Operating one of the largest healthcare group purchasing organizations in the United States with over 4,350 hospital members, Premier (NASDAQ:PINC) is a technology-driven healthcare improvement company that helps hospitals, health systems, and other providers reduce costs and improve clinical outcomes.
Why Do We Pass on PINC?
- Sales tumbled by 9.3% annually over the last two years, showing market trends are working against its favor during this cycle
- Sales are projected to tank by 10.6% over the next 12 months as its demand continues evaporating
- Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term
Premier’s stock price of $22.86 implies a valuation ratio of 17x forward P/E. Read our free research report to see why you should think twice about including PINC in your portfolio.
One Stock to Buy:
Palantir (PLTR)
One-Month Return: +6.4%
Started by Peter Thiel after seeing US defence agencies struggle in the aftermath of the 2001 terrorist attacks, Palantir (NYSE:PLTR) offers software as a service platform that helps government agencies and large enterprises use data to make better decisions.
Why Is PLTR a Good Business?
- Average billings growth of 38.6% over the last year enhances its liquidity and shows there is steady demand for its products
- Fast payback periods on sales and marketing expenses allow the company to invest heavily and onboard many customers concurrently
- Strong free cash flow margin of 47.2% enables it to reinvest or return capital consistently
Palantir is trading at $131.63 per share, or 81.2x forward price-to-sales. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
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 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.