1 Momentum Stock to Keep an Eye On 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.
However, not all companies with momentum are long-term winners, and many investors have lost money by following short-term trends. Keeping that in mind, here is one stock we think lives up to the hype and two not so much.
Two Stocks to Sell:
Boeing (BA)
One-Month Return: +11.3%
One of the companies that forms a duopoly in the commercial aircraft market, Boeing (NYSE:BA) develops, manufactures, and services commercial airplanes, defense products, and space systems.
Why Do We Think BA Will Underperform?
- Underwhelming unit sales over the past two years indicate demand is soft and that the company may need to revise its strategy
- Negative free cash flow raises questions about the return timeline for its investments
- EBITDA losses may force it to accept punitive lending terms or high-cost debt
Boeing is trading at $229.57 per share, or 290.6x forward P/E. Dive into our free research report to see why there are better opportunities than BA.
Northrop Grumman (NOC)
One-Month Return: +9.8%
Responsible for the development of the first stealth bomber, Northrop Grumman (NYSE:NOC) specializes in providing aerospace, defense, and security solutions for various industry applications.
Why Is NOC Risky?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Costs have risen faster than its revenue over the last five years, causing its operating margin to decline by 5.7 percentage points
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
Northrop Grumman’s stock price of $607.95 implies a valuation ratio of 22.2x forward P/E. Read our free research report to see why you should think twice about including NOC in your portfolio.
One Stock to Watch:
Old Second Bancorp (OSBC)
One-Month Return: -0.3%
Dating back to 1871 as one of the Chicago area's longest-standing financial institutions, Old Second Bancorp (NASDAQ:OSBC) is an Illinois-based community bank offering deposit services, commercial and consumer loans, wealth management, and mortgage products through its 53 branch locations.
Why Does OSBC Stand Out?
- Impressive 24.4% annual net interest income growth over the last five years indicates it’s winning market share this cycle
- Market share will likely rise over the next 12 months as its expected net interest income growth of 21.2% is robust
- Differentiated product suite results in a Strong performance of its loan book results in a High-yielding loan book and low cost of funds are reflected in its best-in-class net interest margin of 4.8%
At $19.74 per share, Old Second Bancorp trades at 1.2x forward P/B. Is now the right time to buy? See for yourself in our in-depth research report, it’s free for active Edge members.
Stocks We Like Even More
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 9 Market-Beating Stocks. 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.