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.
However, not all companies with momentum are long-term winners, and many investors have lost money by following short-term trends. Keeping that in mind, here are two stocks with lasting competitive advantages and one best left ignored.
One Stock to Sell:
Annaly Capital Management (NLY)
One-Month Return: +6%
Operating as a real estate investment trust since 1996 with a focus on generating income from interest rate spreads, Annaly Capital Management (NYSE:NLY) is a diversified capital manager that invests in agency mortgage-backed securities, residential mortgage loans, and mortgage servicing rights.
Why Is NLY Risky?
- Net interest income trends were unexciting over the last five years as its 4.7% annual growth was below the typical banking firm
- Net interest margin of 0.5% reflects its high servicing and capital costs
- Earnings per share have dipped by 7.3% annually over the past five years, which is concerning because stock prices follow EPS over the long term
Annaly Capital Management’s stock price of $23.51 implies a valuation ratio of 1.2x forward P/B. Read our free research report to see why you should think twice about including NLY in your portfolio.
Two Stocks to Watch:
Ross Stores (ROST)
One-Month Return: +5.1%
Selling excess inventory or overstocked items from other retailers, Ross Stores (NASDAQ:ROST) is an off-price concept that sells apparel and other goods at prices much lower than department stores.
Why Does ROST Catch Our Eye?
- Aggressive strategy of rolling out new stores to gobble up whitespace is prudent given its same-store sales growth
- Comparable store sales rose by 3.4% on average over the past two years, demonstrating its ability to drive increased spending at existing locations
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures
At $191.36 per share, Ross Stores trades at 27.1x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.
RBC Bearings (RBC)
One-Month Return: +8%
With a Guinness World Record for engineering the largest spherical plain bearing, RBC Bearings (NYSE:RBC) is a manufacturer of bearings and related components for the aerospace & defense, industrial, and transportation industries.
Why Are We Bullish on RBC?
- Annual revenue growth of 21% over the past five years was outstanding, reflecting market share gains this cycle
- Earnings per share have massively outperformed its peers over the last five years, increasing by 19.7% annually
- Strong free cash flow margin of 15.6% enables it to reinvest or return capital consistently
RBC Bearings is trading at $496.92 per share, or 38.1x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
Check out the high-quality names we’ve flagged in our Top 9 Market-Beating Stocks. 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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.