1 Momentum Stock on Our Buy List and 2 We Question

Barchart·05/20/2026 02:30:26

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. All that said, here is one stock we think lives up to the hype and two that may correct.

Two Stocks to Sell:

MarineMax (HZO)

One-Month Return: +3.4%

Appropriately headquartered in Clearwater, Florida, MarineMax (NYSE:HZO) sells boats, yachts, and other marine products.

Why Do We Think HZO Will Underperform?

1. Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
2. Earnings per share have contracted by 66.6% annually over the last three years, a headwind for returns as stock prices often echo long-term EPS performance
3. 11× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings

MarineMax is trading at $31.59 per share, or 31.7x forward P/E. Read our free research report to see why you should think twice about including HZO in your portfolio.

Transocean (RIG)

One-Month Return: +26.7%

Operating one of the world's most capable fleets of ultra-deepwater drillships and harsh environment rigs, Transocean (NYSE:RIG) operates drilling rigs that energy companies rent to drill oil and gas wells in deep ocean waters.

Why Is RIG Risky?

1. Customers postponed purchases of its products and services this cycle as its revenue declined by 4.4% annually over the last ten years
2. High extraction costs and unfavorable asset economics are reflected in its low gross margin of 37.3%
3. Low free cash flow margin of 4.7% for the last five years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders

Transocean’s stock price of $7.47 implies a valuation ratio of 41x forward P/E. If you’re considering RIG for your portfolio, see our FREE research report to learn more.

One Stock to Buy:

Humana (HUM)

One-Month Return: +46.3%

With over 80% of its revenue derived from federal government contracts, Humana (NYSE:HUM) provides health insurance plans and healthcare services to approximately 17 million members, with a strong focus on Medicare Advantage plans for seniors.

Why Should You Buy HUM?

1. Offerings and unique value proposition resonate with customers, as seen in its above-market 13.6% annual sales growth over the last two years
2. Massive revenue base of $137.3 billion gives it meaningful leverage when negotiating reimbursement rates
3. Projected revenue growth of 19.5% for the next 12 months is above its two-year trend, pointing to accelerating demand

At $308 per share, Humana trades at 29.1x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.

High-Quality Stocks for All Market Conditions

ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.

Find out which 5 stocks it's flagging for this month - FREE. Get Our Top 5 Growth 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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.

This article contains syndicated content. We have not reviewed, approved, or endorsed the content, and may receive compensation for placement of the content on this site. For more information please view the Barchart Disclosure Policy here.