The stocks featured in this article have all approached their 52-week highs. When these price levels hit, it typically signals strong business execution, positive market sentiment, or significant industry tailwinds.
While momentum can be a leading indicator, it has burned many investors as it doesn’t always correlate with long-term success. All that said, here is one stock with the fundamentals to back up its performance and two best left ignored.
Two Stocks to Sell:
GMS (GMS)
One-Month Return: -0.5%
Founded in 1971, GMS (NYSE:GMS) distributes specialty building materials including wallboard, ceilings, and insulation products, to the construction industry.
Why Does GMS Fall Short?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Projected sales are flat for the next 12 months, implying demand will slow from its two-year trend
- Earnings per share have dipped by 18.1% annually over the past two years, which is concerning because stock prices follow EPS over the long term
GMS’s stock price of $109.52 implies a valuation ratio of 17.8x forward P/E. Dive into our free research report to see why there are better opportunities than GMS.
CSG (CSGS)
One-Month Return: +0.4%
Powering billions of critical customer interactions annually, CSG Systems (NASDAQ:CSGS) provides cloud-based software platforms that help companies manage customer interactions, process payments, and monetize their services.
Why Should You Sell CSGS?
- 2.6% annual revenue growth over the last two years was slower than its business services peers
- Subscale operations are evident in its revenue base of $1.21 billion, meaning it has fewer distribution channels than its larger rivals
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
At $62.87 per share, CSG trades at 12.8x forward P/E. To fully understand why you should be careful with CSGS, check out our full research report (it’s free).
One Stock to Buy:
Cloudflare (NET)
One-Month Return: +10%
Founded by two grad students of Harvard Business School, Cloudflare (NYSE:NET) is a software-as-a-service platform that helps improve the security, reliability, and loading times of internet applications.
Why Will NET Beat the Market?
- Winning new contracts that can potentially increase in value as its billings growth has averaged 30.3% over the last year
- Expected revenue growth of 26.3% for the next year suggests its market share will rise
- Fast payback periods on sales and marketing expenses allow the company to invest heavily and onboard many customers concurrently
Cloudflare is trading at $201.27 per share, or 29.4x forward price-to-sales. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out 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. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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