Exciting developments are taking place for the stocks in this article. They’ve all surged ahead of the broader market over the last month as catalysts such as new products and positive media coverage have propelled their returns.
While momentum can be a leading indicator, it has burned many investors as it doesn’t always correlate with long-term success. All that said, here is one stock with the fundamentals to back up its performance and two best left ignored.
Two Momentum Stocks to Sell:
Funko (FNKO)
One-Month Return: +21.8%
Boasting partnerships with media franchises like Marvel and One Piece, Funko (NASDAQ: FNKO) is a company specializing in creating and distributing licensed pop culture collectibles.
Why Are We Out on FNKO?
- Annual revenue growth of 5.4% over the last five years was below our standards for the consumer discretionary sector
- Poor free cash flow margin of 2.4% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
Funko is trading at $5.25 per share, or 208.4x forward P/E. Read our free research report to see why you should think twice about including FNKO in your portfolio.
Frontier (ULCC)
One-Month Return: +38.3%
Recognizable for the colorful animals adorning each aircraft tail, Frontier Group Holdings (NASDAQ: ULCC) is an ultra low-cost airline that provides budget-friendly flights throughout the United States and select international destinations in the Americas.
Why Should You Sell ULCC?
- Lackluster 3.7% annual revenue growth over the last two years indicates the company is losing ground to competitors
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
Frontier’s stock price of $5.31 implies a valuation ratio of 0.2x forward price-to-sales. To fully understand why you should be careful with ULCC, check out our full research report (it’s free).
One Momentum Stock to Buy:
TTM Technologies (TTMI)
One-Month Return: +36.8%
As one of the world's largest printed circuit board manufacturers with facilities spanning North America and Asia, TTM Technologies (NASDAQ: TTMI) manufactures printed circuit boards (PCBs) and radio frequency (RF) components for aerospace, defense, automotive, and telecommunications industries.
Why Is TTMI a Top Pick?
- Impressive 17.2% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Demand for the next 12 months is expected to accelerate above its two-year trend as Wall Street forecasts robust revenue growth of 27%
- Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 35.5% annually
At $197.29 per share, TTM Technologies trades at 48.1x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren't just high-quality businesses. Something is happening with them right now. Elite fundamentals meeting near-term momentum - both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week's Strong Momentum stocks - FREE. Get Our Strong Momentum Stocks for Free HERE.
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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
