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Top U.S. stocks for July include Cabaletta Bio Inc. (CABA), Applied Digital Inc. (APLD), and Super Micro Computer Inc. (SMCI). The share prices of all three have soared by almost 650% or more in the past year, while the Russell 3000, a capitalization-weighted stock market index used as a benchmark for the entire U.S. stock market, has returned about 14%.
Below, we list the top five stocks in each category: value, growth, and momentum. All data below is as of July 21, while the benchmark figure above is as of July 24.
Best Value Stocks
Value investing is a factor-based investing strategy that involves picking stocks you believe are trading for less than what they are intrinsically worth, usually measured by the ratio of the stock’s price to one or more fundamental business metrics. A widely accepted value metric is the price-to-earnings (P/E) ratio.
Value investors say that if a business is cheap compared with its intrinsic value (as measured by its P/E ratio, in this case), then the stock price may rise faster than others as the price comes back in line with the worth of the company. These are among the stocks with the lowest 12-month trailing P/E ratio.
| Best Value Stocks | |||
|---|---|---|---|
| Price ($) | Market Capitalization (Market Cap) ($B) | 12-Month Trailing P/E Ratio | |
| Theravance Biopharma Inc. (TBPH) | 9.65 | 0.6 | 0.8 |
| Vital Energy Inc. (VTLE) | 48.52 | 0.9 | 1.0 |
| Southwestern Energy Co. (SWN) | 6.20 | 6.8 | 1.1 |
| Ambac Financial Group Inc. (AMBC) | 13.98 | 0.6 | 1.3 |
| SilverBow Resources Inc. (SBOW) | 31.30 | 0.7 | 1.4 |
Source: YCharts
- Theravance Biopharma Inc.: This is a biopharmaceutical company based in the Cayman Islands that develops and manufactures respiratory medicines such as Yupelri and Trelergy to treat chronic obstructive pulmonary disease (COPD). In recent months the company reduced its headcount by 17% and discontinued some of its research to trim costs.
- Vital Energy Inc.: An oil and natural gas exploration and development company focused on the Permian Basin in West Texas. Formerly known as Laredo Petroleum Inc., the company changed its name to Vital Energy in January 2023. Vital shares have plunged by about a third in the last year amid declining earnings.
- Southwestern Energy Co.: An oil and natural gas explorer and producer with properties in Pennsylvania, Ohio, West Virginia, and Louisiana. In June 2022, the company authorized a $1 billion share repurchase program that can continue through the end of 2023. Southwestern Energy stock has fallen by 16% in the last year as analysts have revised earnings and revenue forecasts downward.
- Ambac Financial Group Inc.: A financial services holding company that offers property and casualty distribution and underwriting. In the first three months of the year, the company’s gross premiums written doubled year-over-year (YOY) to $60.7 million, driven by strong growth in its Everspan and Cirrata business segments.
- SilverBow Resources Inc.: An oil and gas company that produces petroleum products in southern Texas. In 2022 the company acquired Sundance Energy and Sandpoint Resources, Texas-based oil exploration companies. These acquisitions have added hundreds of drilling locations to the company’s portfolio, contributing to an 8% year-over-year increase in oil and gas sales for the first quarter of 2023.
Fastest-Growing Stocks
These are the top stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly YOYF percentage revenue growth and their most recent quarterly YOY earnings per share (EPS) growth.
Both sales and earnings are critical factors in the success of a company. Therefore, ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one or the other figure unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 1,000% were excluded as outliers.
| Fastest-Growing Stocks | ||||
|---|---|---|---|---|
| Price ($) | Market Cap ($B) | EPS Growth (%) | Revenue Growth (%) | |
| Sun Country Airlines Holdings Inc. (SNCY) | 21.76 | 1.2 | 966.7 | 29.8 |
| Modine Manufacturing Co. (MOD) | 35.64 | 1.9 | 956.3 | 7.6 |
| PENN Entertainment Inc. (PENN) | 25.69 | 4.0 | 951.7 | 7.0 |
| Delek US Holdings Inc. (DK) | 25.88 | 1.7 | 955.6 | -12.0 |
| Archrock Inc. (AROC) | 10.98 | 1.7 | 900.0 | 16.5 |
Source: YCharts
- Sun Country Airlines Holdings Inc.: A low-cost airline that operates cargo and passenger flights within North and Central America. The company reported first-quarter earnings on April 27, with net income surging more than tenfold on a 21% increase in average fares and a 41% increase in charter service revenue.
- Modine Manufacturing Co.: A manufacturer of heating and cooling systems and components. For the fourth quarter of its 2023 fiscal year, ended March 31, Modine reported an 8% YOY increase in net sales as sales volume and commercial pricing improved.
- PENN Entertainment Inc.: PENN is a North American provider of integrated entertainment, sports content, and casino gaming. It operates 43 properties in 20 states, and online betting in 17 jurisdictions. In February, PENN fully acquired the sports blog Barstool Sports. PENN reported a 7% year-over-year increase in revenue in the first quarter of 2023, offset by narrower margins from a revenue shift toward higher-tax jurisdictions.
- Delek US Holdings Inc.: A holding company operating in the downstream energy industry. It offers petroleum refining, renewable fuels, logistics, and related services, as well as convenience store locations.
- Archrock Inc.: This is an energy infrastructure firm. The company provides natural gas compression services to customers in the oil and gas industry. Revenue increased by almost 17% YOY in the most recent quarter amid surging demand across the oil and gas sector.
Stocks With the Most Momentum
Momentum investing is a factor-based investing strategy that involves buying a stock whose price has risen faster than the market as a whole. Momentum investors believe that stocks that have outperformed the market will often continue to do so because the factors that caused them to outperform won’t suddenly disappear. In addition, other investors seeking to benefit from the stock’s outperformance will often purchase it, further bidding up its price.
These are the stocks that had the highest total return over the past 12 months.
| Stocks With the Most Momentum | |||
|---|---|---|---|
| Price ($) | Market Cap ($B) | 12-Month Trailing Total Return (%) | |
| Cabaletta Bio Inc. (CABA) | 13.98 | 0.6 | 870.8 |
| Applied Digital Corp. (APLD) | 8.04 | 0.8 | 658.5 |
| Super Micro Computer Inc. (SMCI) | 318.40 | 16.7 | 649.2 |
| Immunovant Inc. (IMVT) | 24.94 | 3.3 | 514.3 |
| Aehr Test Systems (AEHR) | 50.57 | 1.4 | 506.4 |
| Russell 3000 Index | N/A | N/A | 14.3 |
Source: YCharts
- Cabaletta Bio: A biotech company that discovers and develops therapies for autoimmune diseases. Shares started to climb beginning in October 2022 when the company said it was pursuing clinical trials of CABA-201 for use in treating autoimmune disorders.
- Applied Digital: It builds and operates data centers to power blockchain infrastructure and cryptocurrency mining in North America. The company’s shares surged in mid-May on news that it had entered a $180 million agreement to provide artificial intelligence (AI) cloud services to an undisclosed customer.
- Super Micro Computer: This company, also known as Supermicro, manufactures energy-efficient servers and storage systems and provides worldwide support services. Supermicro shares jumped in recent months since it has become a leading server provider for AI platforms.
- Immunovant Inc.: A biopharmaceutical firm that creates and markets drugs for the treatment of autoimmune conditions. Immunovant stock rallied last fall after the company announced it would issue 12.5 million new shares to generate $75 million in gross proceeds.
- Aehr Test Systems: A California-based company that offers systems for use in screening semiconductor chips. The company’s stock rose recently after it announced a new semiconductor order by an undisclosed customer.
Top-Stock Investing Advantages
To become a top stock, a company most likely produces positive trends in its earnings, revenue, and share price. Momentum in these areas indicates a well-run business that has the potential to keep generating profit and creating shareholder value.
Investors can use free stock-screening sites like Finviz to find top stocks, filtering by both fundamental and technical metrics. For example, a trader could find a top stock by scanning for companies that are trading at a new 52-week high or that have reported higher earnings consistently over the past five years.
Liquidity
Top stocks typically receive extensive media coverage and are followed by leading Wall Street analysts. This usually means more liquidity, leading to better prices and faster trade executions. Moreover, top stocks with ample liquidity are more difficult for larger players to manipulate, helping to keep a fair and orderly market in them.
Portfolio Diversification
Because investors can choose to look at top stocks using a wide variety of metrics, it’s possible to invest in leading companies across a diverse set of industries and sectors. This can contribute to a broadly diversified portfolio, which may offer protection against sector-specific risks.
Top-Stock Investing Risks
Missed Opportunities
Investing only in top large-cap stocks means that investors may miss profitable opportunities in other areas of the stock market. Some of the most significant gains come from small-cap stocks that currently are under the radar. For example, an unknown small biotechnology company may announce a breakthrough discovery that propels its share price higher. Even if investors favor trading top stocks, allocating a portion of capital to other stock groups helps avoid missing compelling opportunities.
Trend Reversals
The trend is your friend—until it’s not. Even top large-cap stocks with a track record of earnings growth and creating shareholder value encounter unforeseen challenges. For example, cruise line companies, such as Carnival Corp. (CCL) and Norwegian Cruise Line Holdings Ltd. (NCLH), reported increased revenue in the years leading up to the pandemic but watched their top line sink to unprecedented lows for several years due to no-sail orders and a collapse in passenger demand during the worldwide pandemic.
When investing in top stocks, investors should always use a stop-loss order to protect against sudden trend reversals.
The comments, opinions, and analyses expressed on Investopedia are for informational purposes online. Read our warranty and liability disclaimer for more info.
As of the date this article was written, the author does not own any of the above stocks.
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