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.
While momentum can be a leading indicator, it has burned many investors as it doesn’t always correlate with long-term success. All that said, here are two stocks with the fundamentals to back up their performance and one not so much.
One Stock to Sell:
RXO (RXO)
One-Month Return: +45%
With access to millions of trucks, RXO (NYSE:RXO) offers full-truckload, less-than-truckload, and last-mile deliveries.
Why Do We Avoid RXO?
- Declining unit sales over the past two years show it’s struggled to increase its sales volumes and had to rely on price increases
- Free cash flow margin shrank by 5.3 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
- Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders
At $28.38 per share, RXO trades at 80.6x forward P/E. If you’re considering RXO for your portfolio, see our FREE research report to learn more.
Two Stocks to Buy:
APA Corporation (APA)
One-Month Return: +0.6%
Operating in three continents with a history stretching back to 1954, APA Corporation (NASDAQ:APA) explores for, develops, and produces crude oil, natural gas, and natural gas liquids in the U.S., Egypt, and the U.K. North Sea.
Why Will APA Outperform?
- Offerings and unique value proposition resonate with customers, as seen in its above-market 4.9% annual sales growth over the last ten years
- Unparalleled revenue scale of $8.37 billion gives it advantageous pricing and terms with suppliers
- Highly-profitable operating model results in strong unit economics and a stellar gross margin of 67.7%
APA Corporation is trading at $47.68 per share, or 8.7x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Riley Exploration Permian (REPX)
One-Month Return: +3.4%
Operating in counties where legacy oil fields have been producing since the early 1900s, Riley Exploration Permian (NYSE:REPX) drills for and produces oil and natural gas from horizontal wells in the Permian Basin of West Texas and New Mexico.
Why Are We Bullish on REPX?
- Market share has increased this cycle as its 30.8% annual revenue growth over the last eight years was exceptional
- Highly-profitable operating model results in strong unit economics and a best-in-class gross margin of 76.4%
- Strong free cash flow margin of 16.1% enables it to reinvest or return capital consistently
Riley Exploration Permian’s stock price of $46.43 implies a valuation ratio of 6.2x forward P/E. Is now a good time to buy? See for yourself in our full 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 meet 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 (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.