Each stock in this article is trading near its 52-week high. These elevated prices usually indicate some degree of investor confidence, business improvements, or favorable market conditions.

However, not all companies with momentum are long-term winners, and many investors have lost money by following short-term trends. Keeping that in mind, here are two stocks with lasting competitive advantages and one best left ignored.

One Stock to Sell:

Annaly Capital Management (NLY)

One-Month Return: +6%

Operating as a real estate investment trust since 1996 with a focus on generating income from interest rate spreads, Annaly Capital Management (NYSE: NLY) is a diversified capital manager that invests in agency mortgage-backed securities, residential mortgage loans, and mortgage servicing rights.

Why Is NLY Risky?

1. Net interest income trends were unexciting over the last five years as its 4.7% annual growth was below the typical banking firm
2. Net interest margin of 0.5% reflects its high servicing and capital costs
3. Earnings per share have dipped by 7.3% annually over the past five years, which is concerning because stock prices follow EPS over the long term

Annaly Capital Management’s stock price of $23.51 implies a valuation ratio of 1.2x forward P/B. Read our free research report to see why you should think twice about including NLY in your portfolio.

Two Stocks to Watch:

Ross Stores (ROST)

One-Month Return: +5.1%

Selling excess inventory or overstocked items from other retailers, Ross Stores (NASDAQ: ROST) is an off-price concept that sells apparel and other goods at prices much lower than department stores.

Why Does ROST Catch Our Eye?

1. Aggressive strategy of rolling out new stores to gobble up whitespace is prudent given its same-store sales growth
2. Comparable store sales rose by 3.4% on average over the past two years, demonstrating its ability to drive increased spending at existing locations
3. Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures

At $191.36 per share, Ross Stores trades at 27.1x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.

RBC Bearings (RBC)

One-Month Return: +8%

With a Guinness World Record for engineering the largest spherical plain bearing, RBC Bearings (NYSE: RBC) is a manufacturer of bearings and related components for the aerospace & defense, industrial, and transportation industries.

Why Are We Bullish on RBC?

1. Annual revenue growth of 21% over the past five years was outstanding, reflecting market share gains this cycle
2. Earnings per share have massively outperformed its peers over the last five years, increasing by 19.7% annually
3. Strong free cash flow margin of 15.6% enables it to reinvest or return capital consistently

RBC Bearings is trading at $496.92 per share, or 38.1x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.

Stocks We Like Even More

Check out the high-quality names we’ve flagged in our Top 9 Market-Beating Stocks. 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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.