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. Keeping that in mind, here are two stocks with lasting competitive advantages and one best left ignored.
One Stock to Sell:
Ducommun (DCO)
One-Month Return: +16.1%
California’s oldest company, Ducommun (NYSE: DCO) is a provider of engineering and manufacturing services for high-performance products primarily within the aerospace and defense industries.
Why Does DCO Fall Short?
- Backlog has dropped by 16% on average over the past two years, suggesting it’s losing orders as competition picks up
- Efficiency has decreased over the last five years as its operating margin fell by 11.2 percentage points
- Below-average returns on capital indicate management struggled to find compelling investment opportunities, and its shrinking returns suggest its past profit sources are losing steam
At $166.89 per share, Ducommun trades at 37x forward P/E. Dive into our free research report to see why there are better opportunities than DCO.
Two Stocks to Buy:
Philip Morris (PM)
One-Month Return: -3.1%
Founded in 1847, Philip Morris International (NYSE: PM) manufactures and sells a wide range of tobacco and nicotine-containing products, including cigarettes, heated tobacco products, and oral nicotine pouches.
Why Are We Backing PM?
- Unique products and pricing power are reflected in its best-in-class gross margin of 66.5%
- Highly efficient business model is illustrated by its impressive 36.5% operating margin
- Robust free cash flow margin of 26.1% gives it many options for capital deployment
Philip Morris’s stock price of $183.74 implies a valuation ratio of 21.1x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
TD SYNNEX (SNX)
One-Month Return: +21.9%
Serving as the crucial middleman in the technology supply chain, TD SYNNEX (NYSE: SNX) is a global technology distributor that connects thousands of IT manufacturers with resellers, helping businesses access hardware, software, and technology solutions.
Why Will SNX Beat the Market?
- Annual revenue growth of 25.6% over the last five years was superb and indicates its market share increased during this cycle
- Massive revenue base of $65.14 billion makes it a well-known name that influences purchasing decisions
- Free cash flow margin jumped by 3.4 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
TD SYNNEX is trading at $280.73 per share, or 16.4x forward P/E. Is now the right time to buy? See for yourself in our in-depth 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 (+1,326% 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.
