
Great things are happening to the stocks in this article. They’re all outperforming the market over the last month because of positive catalysts such as a new product line, constructive news flow, or even a loyal Reddit fanbase.
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 that may correct.
Two Momentum Stocks to Sell:
Herbalife (HLF)
One-Month Return: +16.9%
With the first products sold out of the trunk of the founder’s car, Herbalife (NYSE: HLF) today offers a portfolio of shakes, supplements, personal care products, and weight management programs to help customers reach their nutritional and fitness goals.
Why Does HLF Give Us Pause?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Anticipated sales growth of 2.1% for the next year implies demand will be shaky
- Earnings per share fell by 8.3% annually over the last three years while its revenue grew, partly because it diluted shareholders
At $13.94 per share, Herbalife trades at 5.3x forward P/E. Read our free research report to see why you should think twice about including HLF in your portfolio.
Carnival (CCL)
One-Month Return: +16.9%
Boasting outrageous amenities like a planetarium on board its ships, Carnival (NYSE: CCL) is one of the world's largest leisure travel companies and a prominent player in the cruise industry.
Why Do We Pass on CCL?
- Demand for its offerings was relatively low as its number of passenger cruise days has underwhelmed
- Forecasted free cash flow margin suggests the company will fail to improve its cash conversion over the next year
- Underwhelming 3.7% return on capital reflects management’s difficulties in finding profitable growth opportunities
Carnival’s stock price of $25.85 implies a valuation ratio of 11.4x forward P/E. Dive into our free research report to see why there are better opportunities than CCL.
One Momentum Stock to Watch:
Marvell Technology (MRVL)
One-Month Return: +7.5%
Moving away from a low margin storage device management chips in one of the biggest semiconductor business model pivots of the past decade, Marvell Technology (NASDAQ: MRVL) is a fabless designer of special purpose data processing and networking chips used by data centers, communications carriers, enterprises, and autos.
Why Does MRVL Stand Out?
- Market share has increased this cycle as its 33.8% annual revenue growth over the last two years was exceptional
- Market share is on track to rise over the next 12 months as its 65.4% projected revenue growth implies demand will accelerate from its two-year trend
- Operating margin expanded by 14.5 percentage points over the last five years as it scaled and became more efficient
Marvell Technology is trading at $238.31 per share, or 47.6x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
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-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
