The stocks featured in this article have all approached their 52-week highs. When these price levels hit, it typically signals strong business execution, positive market sentiment, or significant industry tailwinds.
However, not all companies with momentum are long-term winners, and many investors have lost money by following short-term trends. Keeping that in mind, here are two stocks we think live up to the hype and one not so much.
One Stock to Sell:
3M (MMM)
One-Month Return: +4.6%
Producers of the first asthma inhaler, 3M Company (NYSE:MMM) is a global conglomerate known for products in industries like healthcare, safety, electronics, and consumer goods.
Why Are We Out on MMM?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Earnings per share have contracted by 2.2% annually over the last five years, a headwind for returns as stock prices often echo long-term EPS performance
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
3M is trading at $159 per share, or 19.8x forward P/E. Dive into our free research report to see why there are better opportunities than MMM.
Two Stocks to Watch:
Palo Alto Networks (PANW)
One-Month Return: +9.8%
Founded in 2005 by security visionary Nir Zuk who sought to reimagine firewall technology, Palo Alto Networks (NASDAQ:PANW) provides AI-powered cybersecurity platforms that protect organizations' networks, clouds, and endpoints from sophisticated threats.
Why Are We Fans of PANW?
- 22% annual revenue growth over the last five years surpassed the sector average as its software resonated with customers
- Software platform has product-market fit given the rapid recovery of its customer acquisition costs
- PANW is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
At $210.25 per share, Palo Alto Networks trades at 14.1x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free.
MercadoLibre (MELI)
One-Month Return: -4.7%
Originally started as an online auction platform, MercadoLibre (NASDAQ:MELI) is a one-stop e-commerce marketplace and fintech platform in Latin America.
Why Will MELI Beat the Market?
- Unique Active Buyers have grown by 20.7% annually, allowing for more profitable cross-selling opportunities if it can build complementary products and features
- Platform’s growing usage and its ability to increase user spending by 15.5% annually showcases its high switching costs
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its rising cash conversion increases its margin of safety
MercadoLibre’s stock price of $2,261 implies a valuation ratio of 22.6x forward EV/EBITDA. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
High-Quality Stocks for All Market Conditions
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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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