The stocks featured in this article are seeing some big returns. Over the past month, they’ve outpaced the market due to some combination of positive news, upbeat results, or supportive macro developments. As such, investors are taking notice and bidding up shares.
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 we think lives up to the hype and two best left ignored.
Two Momentum Stocks to Sell:
Arhaus (ARHS)
One-Month Return: +16.7%
With an aesthetic that features natural materials such as reclaimed wood, Arhaus (NASDAQ: ARHS) is a high-end furniture retailer that sells everything from sofas to rugs to bookcases.
Why Does ARHS Worry Us?
- Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
- Smaller revenue base of $1.38 billion means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
- Revenue growth over the past three years was nullified by the company’s new share issuances as its earnings per share fell by 22% annually
Arhaus is trading at $7.58 per share, or 14.5x forward P/E. If you’re considering ARHS for your portfolio, see our FREE research report to learn more.
AMN Healthcare Services (AMN)
One-Month Return: +15.9%
With a network of thousands of healthcare professionals ranging from nurses to physicians to executives, AMN Healthcare (NYSE: AMN) provides healthcare workforce solutions including temporary staffing, permanent placement, and technology platforms for hospitals and healthcare facilities across the United States.
Why Do We Steer Clear of AMN?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 15.1% annually over the last two years
- Earnings per share have dipped by 16.9% annually over the past five years, which is concerning because stock prices follow EPS over the long term
- Eroding returns on capital suggest its historical profit centers are aging
At $21.52 per share, AMN Healthcare Services trades at 10x forward P/E. To fully understand why you should be careful with AMN, check out our full research report (it’s free).
One Momentum Stock to Buy:
SEI Investments (SEIC)
One-Month Return: +18.8%
Founded in 1968 as Simulated Environments Inc. to train bank loan officers using computer simulations, SEI Investments (NASDAQ: SEIC) provides technology platforms, investment management, and operational solutions for financial institutions, wealth managers, and investors.
Why Will SEIC Beat the Market?
- 9.9% annual revenue growth over the last two years was better than the sector average, highlighting the value of its products and services
- Share buybacks catapulted its annual earnings per share growth to 26%, which outperformed its revenue gains over the last two years
- ROE punches in at 26.5%, illustrating management’s expertise in identifying profitable investments
SEI Investments’s stock price of $90.27 implies a valuation ratio of 15x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren't just high-quality businesses. Something is happening with them right now. Elite fundamentals meeting near-term momentum - both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week's Strong Momentum stocks - FREE. Get Our Strong Momentum Stocks for Free HERE.
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.
