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.
But not every company with momentum is a long-term winner, and plenty of investors have lost money betting on short-term fads. All that said, here is one stock with lasting competitive advantages and two that may correct.
Two stocks to sell:
Sally Beauty (SBH)
One-month return: +14.9%
Catering to both everyday consumers as well as salon professionals, Sally Beauty (NYSE:SBH) is a retailer that sells salon-quality beauty products such as makeup and haircare products.
Why Should You Sell SBH?
- Absence of new stores indicates weak demand as management focuses on improving existing location performance
- Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations
- Modest revenue base of $3.73 billion gives it less fixed cost leverage and fewer distribution channels than larger companies
Sally Beauty is trading at $18.43 per share, or 8.3x forward P/E. Read our free research report to see why you should think twice about including SBH in your portfolio.
Starbucks (SBUX)
One-month return: +10.9%
Started by three friends in Seattle’s historic Pike Place Market, Starbucks (NASDAQ:SBUX) is a globally-renowned coffeehouse chain that offers a wide selection of high-quality coffee, beverages, and food items.
Why Are We Cautious About SBUX?
- Annual sales growth of 5.2% over the last seven years lagged behind its restaurant peers as its large revenue base made it difficult to generate incremental demand
- Projected sales are flat for the next 12 months, implying demand will slow from its seven-year trend
- Flat earnings per share over the last seven years underperformed the sector average
At $104.70 per share, Starbucks trades at 32.1x forward P/E. To fully understand why you should be careful with SBUX, check out our full research report (it’s free).
One stock to watch:
Coca-Cola (KO)
One-month return: +10.9%
A pioneer and behemoth in carbonated soft drinks, Coca-Cola (NYSE:KO) is a storied beverage company best known for its flagship soda.
Why Is KO on Our Radar?
- Unit sales averaged 2.3% growth over the past two years and imply healthy demand for its products
- Differentiated product offerings are difficult to replicate at scale and result in a best-in-class gross margin of 62%
- KO is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its rising cash conversion increases its margin of safety
Coca-Cola’s stock price of $95.92 implies a valuation ratio of 27.1x forward P/E. Is now a good time to buy? See for yourself in our comprehensive 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 (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.