Great things are happening to the stocks in this article. They’re all outperforming the market over the last month because of positive catalysts such as a new product line, constructive news flow, or even a loyal Reddit fanbase.
But not every company with momentum is a long-term winner, and plenty of investors have lost money betting on short-term fads. On that note, here is one stock we think lives up to the hype and two best left ignored.
Two Momentum Stocks to Sell:
Cable One (CABO)
One-Month Return: +21.4%
Founded in 1986, Cable One (NYSE: CABO) provides high-speed internet, cable television, and telephone services, primarily in smaller markets across the United States.
Why Do We Think CABO Will Underperform?
- Performance surrounding its residential data subscribers has lagged its peers
- Free cash flow margin is anticipated to expand by 1.4 percentage points over the next year, providing additional flexibility for investments and share buybacks/dividends
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
At $127.72 per share, Cable One trades at 3.3x forward P/E. Read our free research report to see why you should think twice about including CABO in your portfolio.
Jackson Financial (JXN)
One-Month Return: +13.8%
Spun off from British insurer Prudential plc in 2021 after more than 60 years as its U.S. subsidiary, Jackson Financial (NYSE: JXN) offers annuity products and retirement solutions that help Americans grow and protect their retirement savings and income.
Why Are We Cautious About JXN?
- Net premiums earned expanded by 2.5% annually over the last two years, falling below our expectations for the insurance sector
- Expenses have increased as a percentage of revenue over the last four years as its pre-tax profit margin fell by 34.5 percentage points
- Earnings per share have dipped by 1.9% annually over the past four years, which is concerning because stock prices follow EPS over the long term
Jackson Financial’s stock price of $107.69 implies a valuation ratio of 0.7x forward P/B. Dive into our free research report to see why there are better opportunities than JXN.
One Momentum Stock to Buy:
Dutch Bros (BROS)
One-Month Return: +22.1%
Started in 1992 by two brothers as a single pushcart, Dutch Bros (NYSE: BROS) is a dynamic coffee chain that’s captured the hearts of coffee enthusiasts across the United States.
Why Are We Backing BROS?
- Offensive push to build new restaurants and attack its untapped market opportunities is backed by its same-store sales growth
- Same-store sales growth averaged 5.7% over the past two years, showing it’s bringing new and repeat diners into its restaurants
- Free cash flow margin increased by 5.1 percentage points over the last year, giving the company more capital to invest or return to shareholders
Dutch Bros is trading at $65.14 per share, or 77.5x forward P/E. Is now the right time to buy? 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-micro-cap company Tecnoglass (+1,754% 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.
