1 Surging Stock with Impressive Fundamentals and 2 We Find Risky

Barchart·01/16/2026 03:04:13

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 we think lives up to the hype and two that may correct.

Two Stocks to Sell:

Guess (GES)

One-Month Return: +0.5%

Flexing the iconic upside-down triangle logo with a question mark, Guess (NYSE:GES) is a global fashion brand known for its trendy clothing, accessories, and denim wear.

Why Do We Think GES Will Underperform?

1. Muted 8.7% annual revenue growth over the last five years shows its demand lagged behind its consumer discretionary peers
2. Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
3. 7× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly

At $16.86 per share, Guess trades at 10.7x forward P/E. Dive into our free research report to see why there are better opportunities than GES.

Douglas Dynamics (PLOW)

One-Month Return: +10.4%

Once manufacturing snowplows designed for the iconic jeep vehicle precursor, Douglas Dynamics (NYSE:PLOW) offers snow and ice equipment for the roads and sidewalks.

Why Does PLOW Give Us Pause?

1. 1.8% annual revenue growth over the last two years was slower than its industrials peers
2. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 2.2 percentage points
3. Waning returns on capital imply its previous profit engines are losing steam

Douglas Dynamics’s stock price of $36.92 implies a valuation ratio of 15.5x forward P/E. Check out our free in-depth research report to learn more about why PLOW doesn’t pass our bar.

One Stock to Buy:

Monster (MNST)

One-Month Return: +3.4%

Founded in 2002 as a natural soda and juice company, Monster Beverage (NASDAQ:MNST) is a pioneer of the energy drink category, and its Monster Energy brand targets a young, active demographic.

Why Will MNST Beat the Market?

1. Disciplined cost controls and effective management resulted in a strong two-year operating margin of 28%, and it turbocharged its profits by achieving some fixed cost leverage
2. MNST is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its improved cash conversion implies it’s becoming a less capital-intensive business
3. Industry-leading 37.3% return on capital demonstrates management’s skill in finding high-return investments

Monster is trading at $77.92 per share, or 35.4x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.

The names generating the next wave of massive growth are right here in 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 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.

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