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.
However, not all companies with momentum are long-term winners, and many investors have lost money by following short-term trends. All that said, here is one stock we think lives up to the hype and two best left ignored.
Two Momentum Stocks to Sell:
Dillard's (DDS)
One-Month Return: +21%
With stores located largely in the Southern and Western US, Dillard’s (NYSE:DDS) is a department store chain that sells clothing, cosmetics, accessories, and home goods.
Why Do We Think Twice About DDS?
- Failure to add new stores points to soft demand and a focus on boosting sales at current locations
- Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
- Earnings per share have dipped by 8.9% annually over the past three years, which is concerning because stock prices follow EPS over the long term
At $635.65 per share, Dillard's trades at 18x forward P/E. Read our free research report to see why you should think twice about including DDS in your portfolio.
Concentrix (CNXC)
One-Month Return: +3%
With a team of approximately 450,000 employees across 75 countries, Concentrix (NASDAQ:CNXC) designs and delivers customer experience solutions that help global brands manage their customer interactions across digital channels and contact centers.
Why Is CNXC Not Exciting?
- Incremental sales over the last two years were much less profitable as its earnings per share fell by 1.6% annually while its revenue grew
- ROIC of 2.5% reflects management’s challenges in identifying attractive investment opportunities, and its decreasing returns suggest its historical profit centers are aging
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Concentrix is trading at $25.62 per share, or 2.2x forward P/E. If you’re considering CNXC for your portfolio, see our FREE research report to learn more.
One Momentum Stock to Buy:
EXL (EXLS)
One-Month Return: +23.1%
Originally founded as an outsourcing company in 1999 before evolving into a technology-focused enterprise, EXL (NASDAQ:EXLS) provides data analytics and AI-powered digital operations solutions that help businesses transform their operations and make better decisions.
Why Should You Buy EXLS?
- Annual revenue growth of 16.9% over the past five years was outstanding, reflecting market share gains this cycle
- Notable projected revenue growth of 14.3% for the next 12 months hints at market share gains
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 19% exceeded its revenue gains over the last five years
EXL’s stock price of $35.07 implies a valuation ratio of 14.7x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating 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-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.