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The stocks featured in this article are seeing some big returns. Over the past month, they’ve outpaced the market due to new product launches, positive news, or even a dedicated social media following.

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 lasting competitive advantages and two not so much.

Two Momentum Stocks to Sell:

News Corp (NWSA)

One-Month Return: +7.4%

Established in 2013 after a restructuring, News Corp (NASDAQ:NWSA) is a multinational conglomerate known for its news publishing, broadcasting, digital media, and book publishing.

Why Are We Out on NWSA?

1. Products and services aren't resonating with the market as its revenue declined by 1.4% annually over the last five years

2. Sales are expected to decline once again over the next 12 months as it continues working through a challenging demand environment

3. Underwhelming 6.3% return on capital reflects management’s difficulties in finding profitable growth opportunities

News Corp’s stock price of $28.22 implies a valuation ratio of 31.6x forward P/E. Dive into our free research report to see why there are better opportunities than NWSA.

Terex (TEX)

One-Month Return: +32.2%

With humble beginnings as a dump truck company, Terex (NYSE:TEX) today manufactures lifting and material handling equipment designed to move and hoist heavy goods and materials.

Why Are We Hesitant About TEX?

1. Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy

2. Earnings per share have dipped by 16.4% annually over the past two years, which is concerning because stock prices follow EPS over the long term

3. 6.1 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position

At $46.65 per share, Terex trades at 9.6x forward P/E. Check out our free in-depth research report to learn more about why TEX doesn’t pass our bar.

One Momentum Stock to Buy:

ServiceNow (NOW)

One-Month Return: +29.7%

Founded by Fred Luddy, who coded the company's initial prototype on a flight from San Francisco to London, ServiceNow (NYSE:NOW) is a software provider helping companies automate workflows across IT, HR, and customer service.

Why Are We Backing NOW?

1. Sales pipeline is in good shape as its current remaining performance obligations (cRPO) averaged 22.3% growth over the last year

2. Disciplined cost controls and effective management resulted in a strong trailing 12-month operating margin of 12.9%, and its rise over the last year was fueled by some leverage on its fixed costs

3. NOW is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders