Each stock in this article is trading near its 52-week high. These elevated prices usually indicate some degree of investor confidence, business improvements, or favorable market conditions.
But not every company with momentum is a long-term winner, and plenty of investors have lost money betting on short-term fads. Keeping that in mind, here are two stocks we think live up to the hype and one that may correct.
One Stock to Sell:
CVS Health (CVS)
One-Month Return: +8.1%
With over 9,000 retail pharmacy locations serving as neighborhood health destinations across America, CVS Health (NYSE: CVS) operates retail pharmacies, provides pharmacy benefit management services, and offers health insurance through its Aetna subsidiary.
Why Does CVS Give Us Pause?
- Sizable revenue base leads to growth challenges as its 7% annual revenue increases over the last two years fell short of other healthcare companies
- Estimated sales growth of 2.5% for the next 12 months implies demand will slow from its two-year trend
- Earnings per share fell by 2.9% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
CVS Health’s stock price of $66.33 implies a valuation ratio of 10.8x forward P/E. Check out our free in-depth research report to learn more about why CVS doesn’t pass our bar.
Two Stocks to Watch:
Nvidia (NVDA)
One-Month Return: +14.1%
Founded in 1993 by Jensen Huang and two former Sun Microsystems engineers, Nvidia (NASDAQ: NVDA) is a leading fabless designer of chips used in gaming, PCs, data centers, automotive, and a variety of end markets.
Why Will NVDA Outperform?
- Market share has increased this cycle as its 140% annual revenue growth over the last two years was exceptional
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 80.2% exceeded its revenue gains over the last five years
- Robust free cash flow margin of 48.8% gives it many options for capital deployment, and its growing cash flow gives it even more resources to deploy
At $154.60 per share, Nvidia trades at 32.7x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
ESCO (ESE)
One-Month Return: +4.2%
A developer of the communication systems used in the Batmobile of “The Dark Knight,” ESCO (NYSE: ESE) is a provider of engineered components for the aerospace, defense, and utility sectors.
Why Does ESE Catch Our Eye?
- Demand for the next 12 months is expected to accelerate above its two-year trend as Wall Street forecasts robust revenue growth of 18.2%
- Offerings are difficult to replicate at scale and result in a stellar gross margin of 38.9%
- Earnings per share grew by 20.7% annually over the last two years and trumped its peers
ESCO is trading at $190.33 per share, or 30.7x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 6 Stocks for this week. 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 ServiceNow (+178% between March 2020 and March 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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
