1 Momentum Stock on Our Watchlist and 2 We Brush Off

The stocks featured in this article have all approached their 52-week highs. When these price levels hit, it typically signals strong business execution, positive market sentiment, or significant industry tailwinds.

But not every company with momentum is a long-term winner, and plenty of investors have lost money betting on short-term fads. On that note, here is one stock we think lives up to the hype and two not so much.

Two Stocks to Sell:

Sphere Entertainment (SPHR)

One-Month Return: +41.3%

Famous for its viral Las Vegas Sphere venue, Sphere Entertainment (NYSE:SPHR) hosts live entertainment events and distributes content across various media platforms.

Why Is SPHR Risky?

1. 7.6% annual revenue growth over the last five years was slower than its consumer discretionary peers
2. Cash burn makes us question whether it can achieve sustainable long-term growth
3. Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders

Sphere Entertainment is trading at $59.98 per share, or 13.2x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including SPHR in your portfolio.

Applied Digital (APLD)

One-Month Return: +27.9%

Pivoting from its origins in cryptocurrency mining to become a key player in the AI infrastructure boom, Applied Digital (NASDAQ:APLD) designs and operates specialized data centers that provide high-performance computing infrastructure for artificial intelligence and blockchain applications.

Why Is APLD Not Exciting?

1. Revenue growth over the past two years was nullified by the company’s new share issuances as its earnings per share fell by 78.9% annually
2. Negative free cash flow raises questions about the return timeline for its investments
3. Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution

Applied Digital’s stock price of $20.52 implies a valuation ratio of 51.2x forward EV-to-EBITDA. If you’re considering APLD for your portfolio, see our FREE research report to learn more.

One Stock to Watch:

VSE Corporation (VSEC)

One-Month Return: -1.8%

With roots dating back to 1959 and a strategic focus on extending the life of transportation assets, VSE Corporation (NASDAQ:VSEC) provides aftermarket parts distribution and maintenance, repair, and overhaul services for aircraft and vehicle fleets in commercial and government markets.

Why Is VSEC Interesting?

1. Impressive 22.5% annual revenue growth over the last two years indicates it’s winning market share this cycle
2. Operating profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
3. Performance over the past five years shows its incremental sales were more profitable, as its annual earnings per share growth of 14.2% outpaced its revenue gains

At $163.99 per share, VSE Corporation trades at 41.3x 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

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 9 Market-Beating Stocks. 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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