The stocks featured in this article are seeing some big returns. Over the past month, they’ve outpaced the market due to some combination of positive news, upbeat results, or supportive macro developments. As such, investors are taking notice and bidding up shares.
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 with the fundamentals to back up its performance and two that may correct.
Two Momentum Stocks to Sell:
Cracker Barrel (CBRL)
One-Month Return: +63.7%
Known for its country-themed food and merchandise, Cracker Barrel (NASDAQ: CBRL) is a beloved American restaurant and retail chain that celebrates the warmth and charm of Southern hospitality.
Why Do We Avoid CBRL?
- Disappointing same-store sales over the past two years show customers aren’t responding well to its menu offerings and dining experience
- Earnings per share have dipped by 32.8% annually over the past seven years, which is concerning because stock prices follow EPS over the long term
- High net-debt-to-EBITDA ratio of 7× increases the risk of forced asset sales or dilutive financing if operational performance weakens
At $47.22 per share, Cracker Barrel trades at 93.5x forward P/E. If you’re considering CBRL for your portfolio, see our FREE research report to learn more.
Tandem Diabetes (TNDM)
One-Month Return: +11.8%
With technology that automatically adjusts insulin delivery based on continuous glucose monitoring data, Tandem Diabetes Care (NASDAQ: TNDM) develops and manufactures automated insulin delivery systems that help people with diabetes manage their blood glucose levels.
Why Are We Out on TNDM?
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 19.1% annually while its revenue grew
- Negative returns on capital show that some of its growth strategies have backfired, and its shrinking returns suggest its past profit sources are losing steam
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
Tandem Diabetes is trading at $15.50 per share, or 17.7x forward EV-to-EBITDA. To fully understand why you should be careful with TNDM, check out our full research report (it’s free).
One Momentum Stock to Buy:
GE Aerospace (GE)
One-Month Return: +25.2%
One of the original 12 companies on the Dow Jones Industrial Average, General Electric (NYSE: GE) is a multinational conglomerate providing technologies for various sectors including aviation, power, renewable energy, and healthcare.
Why Are We Backing GE?
- Annual revenue growth of 16.7% over the last two years was superb and indicates its market share increased during this cycle
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 41.9% exceeded its revenue gains over the last two years
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its improved cash conversion implies it’s becoming a less capital-intensive business
GE Aerospace’s stock price of $357.25 implies a valuation ratio of 46.1x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating 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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
