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.
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 are two stocks with the fundamentals to back up their performance and one best left ignored.
One Stock to Sell:
Amdocs (DOX)
One-Month Return: +2.3%
Powering the digital experiences of approximately 400 communications companies worldwide, Amdocs (NASDAQ:DOX) provides software and services that help telecommunications and media companies manage customer relationships, monetize services, and automate network operations.
Why Are We Out on DOX?
- Sales pipeline suggests its future revenue growth may not meet our standards as its average backlog growth of 1.6% for the past two years was weak
- Forecasted revenue decline of 3.5% for the upcoming 12 months implies demand will fall off a cliff
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 4.6 percentage points
Amdocs is trading at $91.71 per share, or 12.6x forward P/E. Check out our free in-depth research report to learn more about why DOX doesn’t pass our bar.
Two Stocks to Watch:
Watts Water Technologies (WTS)
One-Month Return: +12%
Founded in 1874, Watts Water (NYSE:WTS) specializes in manufacturing water products and systems for residential, commercial, and industrial applications globally.
Why Is WTS Interesting?
- Offerings are mission-critical for businesses and lead to a premier gross margin of 45%
- Operating profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 16.9% exceeded its revenue gains over the last five years
At $239.29 per share, Watts Water Technologies trades at 25.8x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
McKesson (MCK)
One-Month Return: +2%
With roots dating back to 1833, making it one of America's oldest continuously operating businesses, McKesson (NYSE:MCK) is a healthcare services company that distributes pharmaceuticals, medical supplies, and provides technology solutions to pharmacies, hospitals, and healthcare providers.
Why Are We Backing MCK?
- Offerings and unique value proposition resonate with customers, as seen in its above-market 13.9% annual sales growth over the last two years
- Enormous revenue base of $359.1 billion gives it economies of scale and advantages over new entrants due to the industry’s regulatory complexity
- Share repurchases over the last five years enabled its annual earnings per share growth of 17.2% to outpace its revenue gains
McKesson’s stock price of $721.20 implies a valuation ratio of 19.6x forward P/E. Is now a good time to buy? Find out in our full 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free.