2 Surging Stocks with Exciting Potential and 1 We Brush Off

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.

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 not so much.

One Stock to Sell:

Applied Industrial (AIT)

One-Month Return: +1.4%

Formerly called The Ohio Ball Bearing Company, Applied Industrial (NYSE:AIT) distributes industrial products–everything from power tools to industrial valves–and services to a wide variety of industries.

Why Does AIT Give Us Pause?

1. Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
2. Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 5.2%
3. Earnings growth underperformed the sector average over the last two years as its EPS grew by just 5% annually

Applied Industrial is trading at $281.30 per share, or 25.3x forward P/E. To fully understand why you should be careful with AIT, check out our full research report (it’s free).

Two Stocks to Watch:

Installed Building Products (IBP)

One-Month Return: +7.6%

Founded in 1977, Installed Building Products (NYSE:IBP) is a company specializing in the installation of insulation, waterproofing, and other complementary building products for residential and commercial construction.

Why Could IBP Be a Winner?

1. Annual revenue growth of 13% over the past five years was outstanding, reflecting market share gains this cycle
2. Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
3. ROIC punches in at 21.5%, illustrating management’s expertise in identifying profitable investments, and its returns are growing as it capitalizes on even better market opportunities

Installed Building Products’s stock price of $322.98 implies a valuation ratio of 30.4x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.

UMB Financial (UMBF)

One-Month Return: +4.6%

With roots dating back to 1913 and a name derived from "United Missouri Bank," UMB Financial (NASDAQ:UMBF) is a financial holding company that provides banking, asset management, and fund services to commercial, institutional, and individual customers.

Why Do We Like UMBF?

1. Impressive 20.6% annual net interest income growth over the last five years indicates it’s winning market share this cycle
2. Net interest margin jumped by 55.4 basis points (100 basis points = 1 percentage point) over the last two years, giving the firm more resources to pursue growth initiatives
3. Efficiency ratio improvement of -3.1 percentage points is projected for next year as the firm achieves greater operating leverage

At $126.10 per share, UMB Financial trades at 1.2x forward P/B. Is now the time to initiate a position? Find out in our full research report, it’s free.

Stocks We Like Even More

If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.

Don’t wait for the next volatility shock. Check out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.