Exciting developments are taking place for the stocks in this article. They’ve all surged ahead of the broader market over the last month as catalysts such as new products and positive media coverage have propelled their returns.
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 Momentum Stock to Sell:
Mayville Engineering (MEC)
One-Month Return: +23.7%
Originally founded solely on tool and die manufacturing, Mayville Engineering Company (NYSE:MEC) specializes in metal fabrication, tube bending, and welding to be used in various industries.
Why Does MEC Fall Short?
- Annual sales declines of 3.1% for the past two years show its products and services struggled to connect with the market during this cycle
- Gross margin of 12.8% is below its competitors, leaving less money to invest in areas like marketing and R&D
- Earnings per share have dipped by 52.4% annually over the past two years, which is concerning because stock prices follow EPS over the long term
Mayville Engineering’s stock price of $21.94 implies a valuation ratio of 99.8x forward P/E. Check out our free in-depth research report to learn more about why MEC doesn’t pass our bar.
Two Momentum Stocks to Buy:
Trane Technologies (TT)
One-Month Return: +19.9%
With low-pressure heating systems as its first product, Trane (NYSE:TT) designs, manufactures, and sells HVAC and refrigeration systems, the former to commercial and residential building customers and the latter to commercial truck manufacturers.
Why Do We Love TT?
- Annual revenue growth of 11.4% over the last five years was superb and indicates its market share increased during this cycle
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 20.2% exceeded its revenue gains over the last two years
- ROIC punches in at 24.6%, illustrating management’s expertise in identifying profitable investments, and its returns are growing as it capitalizes on even better market opportunities
Trane Technologies is trading at $464.42 per share, or 31.4x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
McKesson (MCK)
One-Month Return: +13.5%
With roots dating back to 1833, making it one of America's oldest continuously operating businesses, McKesson (NYSE:MCK) is a healthcare services company that distributes pharmaceuticals, medical supplies, and provides technology solutions to pharmacies, hospitals, and healthcare providers.
Why Are We Bullish on MCK?
- 14.9% annual revenue growth over the last two years surpassed the sector average as its offerings resonated with customers
- Massive revenue base of $398 billion in a highly regulated sector makes the company difficult to replace, giving it meaningful negotiating power
- Share buybacks catapulted its annual earnings per share growth to 18%, which outperformed its revenue gains over the last five years
At $933.08 per share, McKesson trades at 21.6x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
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 Strong Momentum Stocks for this week. 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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
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