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.
But not every company with momentum is a long-term winner, and plenty of investors have lost money betting on short-term fads. All that said, here is one stock with lasting competitive advantages and two best left ignored.
Two Momentum Stocks to Sell:
Semrush (SEMR)
One-Month Return: +60%
Born from the need to make sense of the complex digital marketing landscape, Semrush (NYSE:SEMR) is a software-as-a-service platform that helps companies improve their online visibility, analyze digital marketing efforts, and optimize content across search engines and social media.
Why Does SEMR Give Us Pause?
- Struggled to drive increased usage of its software, demonstrated by its subpar 106% net revenue retention rate
- Operating margin dropped by 4.3 percentage points over the last year as the company focused on expansion rather than profitability
- Poor free cash flow margin of 9.7% for the last year limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
Semrush’s stock price of $11.76 implies a valuation ratio of 3.6x forward price-to-sales. Dive into our free research report to see why there are better opportunities than SEMR.
Leggett & Platt (LEG)
One-Month Return: +25.9%
Founded in 1883, Leggett & Platt (NYSE:LEG) is a diversified manufacturer of products and components for various industries.
Why Are We Out on LEG?
- Flat sales over the last five years suggest it must innovate and find new ways to grow
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Leggett & Platt is trading at $11.02 per share, or 10.3x forward P/E. Check out our free in-depth research report to learn more about why LEG doesn’t pass our bar.
One Momentum Stock to Watch:
Vita Coco (COCO)
One-Month Return: +28.8%
Founded in 2004 followed by a 2021 IPO, The Vita Coco Company (NASDAQ:COCO) offers coconut water products that are a natural way to quench thirst.
Why Should COCO Be on Your Watchlist?
- Products are selling at a rapid clip as its unit sales averaged an outstanding 10.8% growth rate over the past two years
- Earnings per share grew by 89.3% annually over the last three years and trumped its peers
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures, and its returns are climbing as it finds even more attractive growth opportunities
At $53.72 per share, Vita Coco trades at 37.5x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out 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 Kadant (+351% 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
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