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. On that note, here is one stock with the fundamentals to back up its performance and two not so much.
Two Stocks to Sell:
AbbVie (ABBV)
One-Month Return: +1.6%
Born from a 2013 spinoff of Abbott Laboratories' pharmaceutical business, AbbVie (NYSE:ABBV) is a biopharmaceutical company that develops and markets medications for autoimmune diseases, cancer, neurological disorders, and other complex health conditions.
Why Are We Wary of ABBV?
- Underwhelming constant currency revenue performance over the past two years suggests its product offering at current prices doesn’t resonate with customers
- Expenses have increased as a percentage of revenue over the last five years as its adjusted operating margin fell by 11.4 percentage points
- Incremental sales over the last five years were less profitable as its earnings per share were flat while its revenue grew
At $231.59 per share, AbbVie trades at 16.7x forward P/E. To fully understand why you should be careful with ABBV, check out our full research report (it’s free for active Edge members).
Brighthouse Financial (BHF)
One-Month Return: +40.2%
Spun off from MetLife in 2017 to focus specifically on retail financial products, Brighthouse Financial (NASDAQ:BHF) provides annuity contracts and life insurance products designed to help individuals protect wealth, generate income, and transfer assets.
Why Are We Out on BHF?
- 1.4% annual declines in net premiums earned for the past five years indicates policy sales struggled this cycle
- Products and services are facing significant credit quality challenges during this cycle as book value per share has declined by 11.1% annually over the last five years
- High debt-to-equity ratio of 1.3× shows the firm carries too much debt relative to shareholder equity, increasing bankruptcy risk
Brighthouse Financial is trading at $65.61 per share, or 0.8x forward P/B. Dive into our free research report to see why there are better opportunities than BHF.
One Stock to Buy:
ESCO (ESE)
One-Month Return: -0.1%
A developer of the communication systems used in the Batmobile of “The Dark Knight,” ESCO (NYSE:ESE) is a provider of engineered components for the aerospace, defense, and utility sectors.
Why Are We Bullish on ESE?
- Sales pipeline is in good shape as its backlog averaged 29% growth over the past two years
- Operating margin improvement of 4.3 percentage points over the last five years demonstrates its ability to scale efficiently
- Additional sales over the last two years increased its profitability as the 30.9% annual growth in its earnings per share outpaced its revenue
ESCO’s stock price of $218.99 implies a valuation ratio of 30.9x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 5 Strong Momentum Stocks for this week. 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 Exlservice (+354% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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