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.
While momentum can be a leading indicator, it has burned many investors as it doesn’t always correlate with long-term success. Keeping that in mind, here are two stocks with the fundamentals to back up their performance and one that may correct.
One Momentum Stock to Sell:
Commercial Vehicle Group (CVGI)
One-Month Return: +20.9%
Formed from a partnership between two distinct companies, CVG (NASDAQ: CVGI) offers various components used in vehicles and systems used in warehouses.
Why Is CVGI Risky?
- Sales tumbled by 2% annually over the last five years, showing market trends are working against its favor during this cycle
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
- High net-debt-to-EBITDA ratio of 6× could force the company to raise capital at unfavorable terms if market conditions deteriorate
Commercial Vehicle Group is trading at $4.25 per share, or 10.1x forward EV-to-EBITDA. To fully understand why you should be careful with CVGI, check out our full research report (it’s free).
Two Momentum Stocks to Watch:
Urban Outfitters (URBN)
One-Month Return: +18.8%
Founded as a purveyor of vintage items, Urban Outfitters (NASDAQ: URBN) now largely sells new apparel and accessories to teens and young adults seeking on-trend fashion.
Why Does URBN Stand Out?
- New store openings and solid same-store sales performance have boosted its top-line growth
- Locations open for at least a year are seeing increased demand as same-store sales have averaged 4.6% growth over the past two years
- Performance over the past three years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
At $72.74 per share, Urban Outfitters trades at 12.5x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Installed Building Products (IBP)
One-Month Return: +15.3%
Founded in 1977, Installed Building Products (NYSE: IBP) is a company specializing in the installation of insulation, waterproofing, and other complementary building products for residential and commercial construction.
Why Could IBP Be a Winner?
- Market share has increased this cycle as its 12.4% annual revenue growth over the last five years was exceptional
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 21.4% exceeded its revenue gains over the last five years
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures, and its rising returns show it’s making even more lucrative bets
Installed Building Products’s stock price of $302.57 implies a valuation ratio of 27.8x forward P/E. Is now the right time to buy? See for yourself 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 meeting 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 (+1,326% between June 2020 and June 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.
