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.
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 with the fundamentals to back up their performance and one that may correct.
One Stock to Sell:
Transocean (RIG)
One-Month Return: +4.1%
Operating one of the world's most capable fleets of ultra-deepwater drillships and harsh environment rigs, Transocean (NYSE: RIG) operates drilling rigs that energy companies rent to drill oil and gas wells in deep ocean waters.
Why Are We Out on RIG?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 6% annually over the last ten years
- Gross margin of 36.6% is below its competitors, leaving less money to invest in exploration and production
- Efficiency has decreased over the last five years as its EBITDA margin fell by 2.8 percentage points
Transocean is trading at $6.39 per share, or 31.5x forward P/E. Check out our free in-depth research report to learn more about why RIG doesn’t pass our bar.
Two Stocks to Watch:
Ross Stores (ROST)
One-Month Return: +5.1%
Selling excess inventory or overstocked items from other retailers, Ross Stores (NASDAQ: ROST) is an off-price concept that sells apparel and other goods at prices much lower than department stores.
Why Do We Like ROST?
- Store expansion strategy is justified by its healthy same-store sales
- Same-store sales growth averaged 3.6% over the past two years, showing it’s bringing new and repeat shoppers into its stores
- Industry-leading 31.6% return on capital demonstrates management’s skill in finding high-return investments
At $208.23 per share, Ross Stores trades at 28.6x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
Texas Pacific Land (TPL)
One-Month Return: +24.2%
One of America's largest private landowners with roughly 868,000 acres in the Permian Basin, Texas Pacific Land (NYSE: TPL) owns land in West Texas and earns revenue from oil and gas royalties, water services, and land leases.
Why Should You Buy TPL?
- Impressive 26.2% annual revenue growth over the last ten years indicates it’s winning market share this cycle
- Attractive asset base leads to wonderful unit economics and a best-in-class gross margin of 95%
- Strong free cash flow margin of 63.4% enables it to reinvest or return capital consistently
Texas Pacific Land’s stock price of $529.66 implies a valuation ratio of 44.5x forward EV-to-EBITDA. Is now a good 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 (+1,326% 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.
