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1 Momentum Stock with Competitive Advantages and 2 We Avoid
Exciting developments are taking place for the stocks in this article. They’ve all surged ahead of the broader market over the last month as catalysts such as new products and positive media coverage have propelled their returns.
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 lasting competitive advantages and two best left ignored.
Two Momentum Stocks to Sell:
Skyworks Solutions (SWKS)
One-Month Return: +28.1%
Result of a merger of Alpha Industries and the wireless communications division of Conexant, Skyworks Solutions (NASDAQ: SWKS) is a designer and manufacturer of chips used in smartphones, autos, and industrial applications to amplify, filter, and process wireless signals.
Why Do We Steer Clear of SWKS?
- 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
- Sales are projected to be flat over the next 12 months and imply weak demand
- Inability to adjust its cost structure while its revenue declined over the last five years led to a 19.6 percentage point drop in the company’s operating margin
At $86.77 per share, Skyworks Solutions trades at 19x forward P/E. Dive into our free research report to see why there are better opportunities than SWKS.
Haemonetics (HAE)
One-Month Return: +17.3%
With roots dating back to 1971 and a mission to improve blood-related healthcare, Haemonetics (NYSE:HAE) provides specialized medical devices and software for blood collection, processing, and management across plasma centers, blood banks, and hospitals.
Why Are We Wary of HAE?
- Sales were flat over the last two years, indicating it’s failed to expand this cycle
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- Smaller revenue base of $1.35 billion means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
Haemonetics is trading at $105.91 per share, or 19.4x forward P/E. Read our free research report to see why you should think twice about including HAE in your portfolio.
One Momentum Stock to Watch:
EPAM (EPAM)
One-Month Return: +18.3%
Founded in 1993 during the early days of offshore software development, EPAM Systems (NYSE:EPAM) provides digital engineering, cloud, and AI transformation services to help global enterprises and startups modernize their technology systems and create digital products.
Why Could EPAM Be a Winner?
- Impressive 13.1% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Earnings per share have comfortably outperformed the peer group average over the last five years, increasing by 11.4% annually
- Stellar returns on capital showcase management’s ability to surface highly profitable business ventures
EPAM’s stock price of $116.77 implies a valuation ratio of 9.1x 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
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 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-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.