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 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?

• Sales were flat over the last five years, indicating it’s failed to expand this cycle
• 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
• 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 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?

• 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
• 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
• 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 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?

• Annual revenue growth of 49.8% over the last two years was superb and indicates its market share increased during this cycle
• Free cash flow profile has moved into positive territory over the last five years, showing the company is at an important crossroads
• 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).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return).

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.