1 Surging Stock with Solid Fundamentals and 2 Facing Challenges

The stocks featured in this article have all approached their 52-week highs. When these price levels hit, it typically signals strong business execution, positive market sentiment, or significant industry tailwinds.

While momentum can be a leading indicator, it has burned many investors as it doesn’t always correlate with long-term success. Keeping that in mind, here is one stock we think lives up to the hype and two best left ignored.

Two Stocks to Sell:

Aflac (AFL)

One-Month Return: -0.8%

Known for its iconic duck mascot that has quacked "Aflac!" in commercials since 2000, Aflac (NYSE:AFL) provides supplemental health and life insurance policies that pay cash benefits directly to policyholders for expenses not covered by their primary insurance.

Why Are We Cautious About AFL?

1. 6.2% annual declines in net premiums earned for the past five years indicates policy sales struggled this cycle
2. Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 9.4% annually
3. Book value per share is projected to remain flat over the next 12 months as profitability decelerates from its two-year trend

At $111.41 per share, Aflac trades at 2x forward P/B. Check out our free in-depth research report to learn more about why AFL doesn’t pass our bar.

Essent Group (ESNT)

One-Month Return: +8.4%

Serving as a crucial bridge between homebuyers and the American dream of homeownership, Essent Group (NYSE:ESNT) provides private mortgage insurance and title services that enable lenders to offer home loans with down payments of less than 20%.

Why Is ESNT Not Exciting?

1. Sluggish 3.1% annualized growth in net premiums earned over the last five years indicates the firm trailed its insurance peers
2. Day-to-day expenses have swelled relative to revenue over the last two years as its pre-tax profit margin fell by 10.2 percentage points
3. Incremental sales over the last two years were less profitable as its 5% annual earnings per share growth lagged its revenue gains

Essent Group’s stock price of $65.25 implies a valuation ratio of 1.1x forward P/B. If you’re considering ESNT for your portfolio, see our FREE research report to learn more.

One Stock to Watch:

Urban Outfitters (URBN)

One-Month Return: +34.5%

Founded as a purveyor of vintage items, Urban Outfitters (NASDAQ:URBN) now largely sells new apparel and accessories to teens and young adults seeking on-trend fashion.

Why Are We Fans of URBN?

1. Brick-and-mortar locations are witnessing elevated demand as their same-store sales growth averaged 4.6% over the past two years
2. Forecasted revenue growth of 8.2% for the next 12 months suggests stronger momentum versus most peers
3. Share repurchases have increased shareholder returns as its annual earnings per share growth of 41.8% exceeded its revenue gains over the last three years

Urban Outfitters is trading at $82.17 per share, or 14.6x 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.

Stocks We Like Even More

If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.

Don’t wait for the next volatility shock. Check out our Top 5 Growth Stocks for this month. 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 Comfort Systems (+782% 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.