2 Momentum Stocks on Our Watchlist and 1 We Ignore
The stocks in this article are all trading near their 52-week highs. This strength often reflects positive developments such as new product launches, favorable industry trends, or improved financial performance.
While momentum can be a leading indicator, it has burned many investors as it doesn’t always correlate with long-term success. On that note, here are two stocks with lasting competitive advantages and one that may correct.
One Stock to Sell:
ICU Medical (ICUI)
One-Month Return: +9.2%
Founded in 1984 and named for its initial focus on intensive care units, ICU Medical (NASDAQ:ICUI) develops and manufactures medical products for infusion therapy, vascular access, and vital care applications used in hospitals and other healthcare settings.
Why Does ICUI Fall Short?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 1.6% annually over the last two years
- Annual earnings per share growth of 2.9% underperformed its revenue over the last five years, showing its incremental sales were less profitable
- Underwhelming 0.9% return on capital reflects management’s difficulties in finding profitable growth opportunities
ICU Medical’s stock price of $161.53 implies a valuation ratio of 19x forward P/E. Check out our free in-depth research report to learn more about why ICUI doesn’t pass our bar.
Two Stocks to Watch:
Burlington (BURL)
One-Month Return: +13.9%
Founded in 1972 as a discount coat and outerwear retailer, Burlington Stores (NYSE:BURL) is now an off-price retailer that has broadened into general apparel, footwear, and home goods.
Why Should BURL Be on Your Watchlist?
- Rapid rollout of new stores to capitalize on market opportunities makes sense given its strong same-store sales performance
- Brick-and-mortar locations are witnessing elevated demand as their same-store sales growth averaged 3.5% over the past two years
- Free cash flow margin increased by 6.4 percentage points over the last year, giving the company more capital to invest or return to shareholders
At $358.09 per share, Burlington trades at 28.9x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Brinker International (EAT)
One-Month Return: +16.6%
Founded by Norman Brinker in Dallas, Brinker International (NYSE:EAT) is a casual restaurant chain that operates the Chili’s, Maggiano’s Little Italy, and It’s Just Wings banners.
Why Are We Positive on EAT?
- Same-store sales growth averaged 15.5% over the past two years, showing it’s bringing new and repeat diners into its restaurants
- $5.73 billion in revenue gives it scale, which leads to bargaining power with suppliers and retailers
- Stellar returns on capital showcase management’s ability to surface highly profitable business ventures, and its returns are climbing as it finds even more attractive growth opportunities
Brinker International is trading at $195.49 per share, or 15.7x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.