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. Keeping that in mind, here is one stock with lasting competitive advantages and two not so much.

Two Momentum Stocks to Sell:

Portillo's (PTLO)

One-Month Return: +24.2%

Begun as a Chicago hot dog stand in 1963, Portillo’s (NASDAQ: PTLO) is a casual restaurant chain that serves Chicago-style hot dogs and beef sandwiches as well as fries and shakes.

Why Should You Sell PTLO?

1. Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new restaurants
2. Investment activity picked up over the last year, pressuring its weak free cash flow margin of -0.9%
3. Short cash runway increases the probability of a capital raise that dilutes existing shareholders

Portillo’s stock price of $5.70 implies a valuation ratio of 29x forward P/E. Dive into our free research report to see why there are better opportunities than PTLO.

Brookdale (BKD)

One-Month Return: +33.4%

With a network of over 650 communities serving approximately 59,000 residents across 41 states, Brookdale Senior Living (NYSE: BKD) operates senior living communities across the United States, offering independent living, assisted living, memory care, and continuing care retirement communities.

Why Does BKD Give Us Pause?

1. Annual sales declines of 2.6% for the past five years show its products and services struggled to connect with the market during this cycle
2. Estimated sales decline of 4.2% for the next 12 months implies a challenging demand environment
3. High net-debt-to-EBITDA ratio of 12× could force the company to raise capital at unfavorable terms if market conditions deteriorate

At $14.35 per share, Brookdale trades at 16.9x forward EV-to-EBITDA. If you’re considering BKD for your portfolio, see our FREE research report to learn more.

One Momentum Stock to Watch:

Leonardo DRS (DRS)

One-Month Return: +21.5%

Developing submarine detection systems for the U.S. Navy, Leonardo DRS (NASDAQ: DRS) is a provider of defense systems, electronics, and military support services.

Why Do We Watch DRS?

1. Impressive 14.5% annual revenue growth over the last two years indicates it’s winning market share this cycle
2. Demand is greater than supply as the company’s 44.8% average backlog growth over the past two years shows it’s securing new contracts and accumulating more orders than it can fulfill
3. Earnings growth has trumped its peers over the last two years as its EPS has compounded at 19.5% annually

Leonardo DRS is trading at $41.41 per share, or 35.9x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.

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 6 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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.