The stocks in this article are all trading near their 52-week highs. This strength often reflects positive developments such as new product launches, favorable industry trends, or improved financial performance.
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 is one stock with the fundamentals to back up its performance and two that may correct.
Two Stocks to Sell:
Webster Financial (WBS)
One-Month Return: +14.5%
Founded during the Great Depression in 1935 and evolving into a major Northeastern financial institution, Webster Financial (NYSE:WBS) is a bank holding company that provides commercial banking, consumer banking, and employee benefits solutions through its Webster Bank and HSA Bank division.
Why Are We Hesitant About WBS?
- Annual revenue growth of 3.7% over the last two years was below our standards for the banking sector
- Projected 2.4 percentage point efficiency ratio increase over the next year signals its day-to-day expenses will rise
- Earnings per share were flat over the last two years while its revenue grew, showing its incremental sales were less profitable
At $72.35 per share, Webster Financial trades at 1.2x forward P/B. Dive into our free research report to see why there are better opportunities than WBS.
Encore Capital Group (ECPG)
One-Month Return: +3.6%
Operating in the often misunderstood world of debt collection since 1999, Encore Capital Group (NASDAQ:ECPG) purchases portfolios of defaulted consumer debt at deep discounts and works with individuals to recover these obligations while helping them toward financial recovery.
Why Does ECPG Worry Us?
- 1.3% annual revenue growth over the last five years was slower than its financials peers
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 15.9% annually
- 11× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly
Encore Capital Group’s stock price of $57.39 implies a valuation ratio of 7.9x forward P/E. If you’re considering ECPG for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
Cencora (COR)
One-Month Return: +6.8%
Formerly known as AmerisourceBergen until its 2023 rebranding, Cencora (NYSE:COR) is a global pharmaceutical distribution company that connects manufacturers with healthcare providers while offering logistics, data analytics, and consulting services.
Why Is COR a Top Pick?
- Dominant market position is represented by its $325.8 billion in revenue, which gives it negotiating power over membership pricing and reimbursement rates
- Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures
Cencora is trading at $365.58 per share, or 20.1x 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
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 Strong Momentum Stocks for this week. 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 Exlservice (+354% five-year return). Find your next big winner with StockStory today.