1 Surging Stock to Target This Week and 2 We Avoid

The stocks in this article are all trading near their 52-week highs. This strength often reflects positive developments such as new product launches, favorable industry trends, or improved financial performance.

While momentum can be a leading indicator, it has burned many investors as it doesn’t always correlate with long-term success. On that note, here is one stock we think lives up to the hype and two not so much.

Two Stocks to Sell:

Steelcase (SCS)

One-Month Return: +5.9%

Founded in 1912 when metal office furniture was replacing wooden alternatives, Steelcase (NYSE:SCS) is a global office furniture manufacturer that designs and produces workplace solutions including desks, chairs, architectural products, and services.

Why Are We Out on SCS?

1. Sales were flat over the last five years, indicating it’s failed to expand this cycle
2. Low free cash flow margin of 1.3% for the last five years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
3. Underwhelming 7.1% return on capital reflects management’s difficulties in finding profitable growth opportunities

Steelcase is trading at $17 per share, or 15.3x forward P/E. To fully understand why you should be careful with SCS, check out our full research report (it’s free).

Allegion (ALLE)

One-Month Return: +5.3%

Allegion plc (NYSE:ALLE) is a provider of security products and solutions that keep people and assets safe and secure in various environments.

Why Do We Think Twice About ALLE?

1. 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
2. Free cash flow margin dropped by 2.7 percentage points over the last five years, implying the company became more capital intensive as competition picked up
3. Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability

Allegion’s stock price of $176.05 implies a valuation ratio of 21.8x forward P/E. If you’re considering ALLE for your portfolio, see our FREE research report to learn more.

One Stock to Buy:

American Superconductor (AMSC)

One-Month Return: +6.3%

Founded in 1987, American Superconductor (NASDAQ:AMSC) has shifted from superconductor research to developing power systems, adapting to changing energy grid needs and naval technology requirements.

Why Should You Buy AMSC?

1. Annual revenue growth of 49.8% over the last two years was superb and indicates its market share increased during this cycle
2. Free cash flow profile has moved into positive territory over the last five years, showing the company is at an important crossroads
3. Improving returns on capital suggest its past investments are beginning to deliver value

At $56.85 per share, American Superconductor trades at 99.2x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 5 Growth Stocks for this month. 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).

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