1 Surging Stock with Exciting Potential and 2 Facing Challenges

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?

1. Underwhelming constant currency revenue performance over the past two years suggests its product offering at current prices doesn’t resonate with customers
2. Expenses have increased as a percentage of revenue over the last five years as its adjusted operating margin fell by 11.4 percentage points
3. 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. 1.4% annual declines in net premiums earned for the past five years indicates policy sales struggled this cycle
2. 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
3. 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?

1. Sales pipeline is in good shape as its backlog averaged 29% growth over the past two years
2. Operating margin improvement of 4.3 percentage points over the last five years demonstrates its ability to scale efficiently
3. 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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