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.
However, not all companies with momentum are long-term winners, and many investors have lost money by following short-term trends. On that note, here is one stock with lasting competitive advantages and two best left ignored.
Two Momentum Stocks to Sell:
Compass (COMP)
One-Month Return: +23.6%
Fueled by its mission to replace the "paper-driven, antiquated workflow" of buying a house, Compass (NYSE: COMP) is a digital-first company operating a residential real estate brokerage in the United States.
Why Do We Think COMP Will Underperform?
- Sluggish trends in its principal agents suggest customers aren’t adopting its solutions as quickly as the company hoped
- Historical operating margin losses point to an inefficient cost structure
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
At $13.26 per share, Compass trades at 21.3x forward P/E. Check out our free in-depth research report to learn more about why COMP doesn’t pass our bar.
Fortune Brands (FBIN)
One-Month Return: +19.9%
Targeting a wide customer base of residential and commercial customers, Fortune Brands (NYSE: FBIN) makes plumbing, security, and outdoor living products.
Why Do We Pass on FBIN?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Efficiency has decreased over the last five years as its operating margin fell by 10.4 percentage points
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 5.3% annually
Fortune Brands’s stock price of $60.80 implies a valuation ratio of 14.7x forward P/E. If you’re considering FBIN for your portfolio, see our FREE research report to learn more.
One Momentum Stock to Watch:
Rocket Companies (RKT)
One-Month Return: +10.6%
Born in Detroit during the 1980s and evolving into a tech-driven financial powerhouse, Rocket Companies (NYSE: RKT) is a fintech company that provides digital mortgage lending, real estate services, and personal finance solutions through its technology platform.
Why Should RKT Be on Your Watchlist?
- Expected net interest income growth of 40% for the next year suggests its market share will rise
- Notable projected tangible book value per share growth of 427% for the next 12 months hints at strong capital generation
- Industry-leading 23.7% return on equity demonstrates management’s skill in finding high-return investments
Rocket Companies is trading at $21.27 per share, or 3.6x forward P/B. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
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.
