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Great things are happening to the stocks in this article. They’re all outperforming the market over the last month because of positive catalysts such as a new product line, constructive news flow, or even a loyal Reddit fanbase.

But not every company with momentum is a long-term winner, and plenty of investors have lost money betting on short-term fads. Keeping that in mind, here is one stock with lasting competitive advantages and two not so much.

Two Momentum Stocks to Sell:

Advanced Energy (AEIS)

One-Month Return: +35.8%

Pioneering technologies for radio frequency power delivery, Advanced Energy (NASDAQ:AEIS) provides power supplies, thermal management systems, and measurement and control instruments for various manufacturing processes.

Why Do We Think AEIS Will Underperform?

1. Sales tumbled by 8.8% annually over the last two years, showing market trends are working against its favor during this cycle

2. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 6.6 percentage points

3. Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability

Advanced Energy is trading at $111.29 per share, or 22.2x forward P/E. If you’re considering AEIS for your portfolio, see our FREE research report to learn more.

Orion (ORN)

One-Month Return: +42%

Established in 1994, Orion (NYSE:ORN) provides construction services for marine infrastructure and industrial projects.

Why Are We Out on ORN?

1. Sales trends were unexciting over the last five years as its 2.4% annual growth was below the typical industrials company

2. Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 10.1% annually

3. Poor free cash flow margin of -0.2% for the last five years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends

At $7.24 per share, Orion trades at 44.6x forward P/E. Check out our free in-depth research report to learn more about why ORN doesn’t pass our bar.

One Momentum Stock to Buy:

Quanta (PWR)

One-Month Return: +31%

A construction engineering services company, Quanta (NYSE:PWR) provides infrastructure solutions to a variety of sectors, including energy and communications.

Why Will PWR Outperform?

1. Sales pipeline is in good shape as its backlog averaged 23.1% growth over the past two years

2. Estimated revenue growth of 10.2% for the next 12 months implies its momentum over the last two years will continue

3. Earnings per share have massively outperformed its peers over the last two years, increasing by 22.4% annually