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 that may correct.
Two Stocks to Sell:
Enact Holdings (ACT)
One-Month Return: +3.8%
Playing a critical role in helping first-time homebuyers access the housing market, Enact Holdings (NASDAQ: ACT) provides private mortgage insurance that enables lenders to offer home loans with lower down payments while protecting against borrower defaults.
Why Does ACT Fall Short?
- Insurance offerings faced market headwinds this cycle, reflected in stagnant net premiums earned over the last five years
- Day-to-day expenses have swelled relative to revenue over the last two years as its combined ratio increased by 8.9 percentage points
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 4.3% annually
Enact Holdings’s stock price of $39.07 implies a valuation ratio of 1x forward P/B. Check out our free in-depth research report to learn more about why ACT doesn’t pass our bar.
Banc of California (BANC)
One-Month Return: +13.5%
Originally established in 1941 and now operating with a tech-forward approach that includes its SmartStreet platform for homeowner associations, Banc of California (NYSE: BANC) is a California-based bank holding company that provides banking services to small and middle-market businesses, entrepreneurs, and individuals.
Why Should You Sell BANC?
- Loans are facing end-market challenges during this cycle, as seen in its flat net interest income over the last five years
- Operational productivity has decreased over the last five years as its efficiency ratio worsened by 21.8 percentage points
- Annual tangible book value per share declines of 3.6% for the past five years show its capital management struggled during this cycle
Banc of California is trading at $19.88 per share, or 1x forward P/B. Dive into our free research report to see why there are better opportunities than BANC.
One Stock to Watch:
Coca-Cola (KO)
One-Month Return: -1.8%
A pioneer and behemoth in carbonated soft drinks, Coca-Cola (NYSE: KO) is a storied beverage company best known for its flagship soda.
Why Are We Fans of KO?
- Dominant market position is represented by its $47.65 billion in revenue, which gives it negotiating power with suppliers and retailers
- Differentiated product offerings are difficult to replicate at scale and lead to a best-in-class gross margin of 61.1%
- Excellent operating margin of 25.7% highlights the efficiency of its business model, and its rise over the last year was fueled by some leverage on its fixed costs
At $70.31 per share, Coca-Cola trades at 21.9x forward P/E. 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 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
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