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 is one stock with the fundamentals to back up its performance and two that may correct.
Two Momentum Stocks to Sell:
Matson (MATX)
One-Month Return: +4.5%
Founded by a Swedish orphan, Matson (NYSE: MATX) is a provider of ocean transportation and logistics services.
Why Are We Wary of MATX?
- Sales trends were unexciting over the last two years as its 4% annual growth was below the typical industrials company
- Free cash flow margin dropped by 12.9 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Eroding returns on capital suggest its historical profit centers are aging
Matson’s stock price of $166.11 implies a valuation ratio of 12.6x forward P/E. To fully understand why you should be careful with MATX, check out our full research report (it’s free).
Stellar Bancorp (STEL)
One-Month Return: +14.5%
Created through strategic mergers to serve the growing Texas business community, Stellar Bancorp (NYSE: STEL) is a Texas bank holding company that provides commercial banking services primarily to small and medium-sized businesses and professionals.
Why Do We Avoid STEL?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 4.2% annually over the last two years
- Concessions to defend its market share have ramped up over the last two years as its net interest margin decreased by 35.6 basis points (100 basis points = 1 percentage point)
- Performance over the past two years shows each sale was less profitable as its earnings per share dropped by 15.1% annually, worse than its revenue
At $37.38 per share, Stellar Bancorp trades at 1.1x forward P/B. If you’re considering STEL for your portfolio, see our FREE research report to learn more.
One Momentum Stock to Watch:
Amalgamated Financial (AMAL)
One-Month Return: 0%
Founded in 1923 by labor unions seeking a financial institution aligned with worker values, Amalgamated Financial (NASDAQGM:AMAL) operates a values-oriented bank that provides commercial banking, trust services, and investment management to socially responsible organizations and individuals.
Why Could AMAL Be a Winner?
- Net interest margin grew by 18.7 basis points (100 basis points = 1 percentage point) over the last two years, giving the firm more chips to play with
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 17.9% exceeded its revenue gains over the last five years
- Annual tangible book value per share growth of 9.5% over the last five years was superb and indicates its capital strength increased during this cycle
Amalgamated Financial is trading at $38.27 per share, or 1.3x forward P/B. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
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.
