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. On that note, here is one stock we think lives up to the hype and two not so much.
Two Stocks to Sell:
Illinois Tool Works (ITW)
One-Month Return: +5.4%
Founded by Byron Smith, an investor who held over 100 patents, Illinois Tool Works (NYSE: ITW) manufactures engineered components and specialized equipment for numerous industries.
Why Is ITW Not Exciting?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Estimated sales growth of 4.1% 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 4% annually
At $285.21 per share, Illinois Tool Works trades at 25x forward P/E. To fully understand why you should be careful with ITW, check out our full research report (it’s free).
Fortive (FTV)
One-Month Return: -4.4%
Taking its name from the Latin root of "strong", Fortive (NYSE: FTV) manufactures products and develops industrial software for numerous industries.
Why Are We Out on FTV?
- Annual sales declines of 3.1% for the past five years show its products and services struggled to connect with the market during this cycle
- Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
- Underwhelming 5.5% return on capital reflects management’s difficulties in finding profitable growth opportunities
Fortive is trading at $58.41 per share, or 19.1x forward P/E. If you’re considering FTV for your portfolio, see our FREE research report to learn more.
One Stock to Watch:
Cardinal Health (CAH)
One-Month Return: -5.5%
Operating as a critical link in the healthcare supply chain since 1979, Cardinal Health (NYSE: CAH) distributes pharmaceuticals and manufactures medical products for hospitals, pharmacies, and healthcare providers across the global healthcare supply chain.
Why Do We Like CAH?
- Massive revenue base of $250.7 billion in a highly regulated sector makes the company difficult to replace, giving it meaningful negotiating power
- Forecasted revenue growth of 8.1% for the next 12 months suggests stronger momentum versus most peers
- Share buybacks propelled its annual earnings per share growth to 12.4%, which outperformed its revenue gains over the last five years
Cardinal Health’s stock price of $224.48 implies a valuation ratio of 19.8x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum 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-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
