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.
But not every company with momentum is a long-term winner, and plenty of investors have lost money betting on short-term fads. Keeping that in mind, here is one stock with the fundamentals to back up its performance and two best left ignored.
Two Stocks to Sell:
Labcorp (LH)
One-Month Return: +7.8%
With over 600 million tests performed annually and involvement in 90% of FDA-approved drugs in 2023, Labcorp (NYSE:LH) provides laboratory testing services and drug development solutions to doctors, hospitals, pharmaceutical companies, and patients worldwide.
Why Are We Wary of LH?
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- Costs have risen faster than its revenue over the last five years, causing its adjusted operating margin to decline by 14.3 percentage points
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
Labcorp’s stock price of $269.31 implies a valuation ratio of 16x forward P/E. Check out our free in-depth research report to learn more about why LH doesn’t pass our bar.
Allstate (ALL)
One-Month Return: +5.4%
Born from a Sears, Roebuck & Co. initiative during the Great Depression with its famous "You're in good hands" slogan, Allstate (NYSE:ALL) is one of America's largest personal property and casualty insurers, offering protection for autos, homes, and personal property.
Why Are We Cautious About ALL?
- Operational productivity has decreased over the last four years as its combined ratio worsened by 4.8 percentage points
- Book value per share was flat over the last five years, indicating it’s failed to build equity value this cycle
- Underwhelming 11.6% return on equity reflects management’s difficulties in finding profitable growth opportunities
At $206.70 per share, Allstate trades at 2.4x forward P/B. Read our free research report to see why you should think twice about including ALL in your portfolio.
One Stock to Watch:
AZZ (AZZ)
One-Month Return: +6.4%
Responsible for projects like nuclear facilities, AZZ (NYSE:AZZ) is a provider of metal coating and power infrastructure solutions.
Why Do We Like AZZ?
- Healthy operating margin of 14.7% shows it’s a well-run company with efficient processes, and its operating leverage amplified its profits over the last five years
- Additional sales over the last two years increased its profitability as the 24.5% annual growth in its earnings per share outpaced its revenue
- Free cash flow margin grew by 13.5 percentage points over the last five years, giving the company more chips to play with
AZZ is trading at $113.57 per share, or 18.7x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
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 Tecnoglass (+1,754% 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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