This medtech name on Josh Brown’s list is hitting the sweet spot for momentum
(This is The Best Stocks in the Market , brought to you by Josh Brown and Sean Russo of Ritholtz Wealth Management.) NOTE: Best Stocks in the Markets will be on hiatus June 1-5. Josh — I’m going to tell you a great story today about a name that appears on the Best Stocks in the Market list and made the cut to get into our in-house Porterhouse portfolio strategy . There are only 58 names in Porterhouse at the moment, while there are over 150 Best Stocks on our list. Because Porterhouse has a tougher selection criteria than the larger list, I pay particular attention to the stocks that get in and stay in. Okay, here’s that story I promised you… Once upon a time there was a man named Miles “Lowell” Edwards. A childhood bout of rheumatic fever had left him with a lifelong fascination with the mechanics of the human heart. At age 60, a time when most men are thinking about retirement, Edwards wanted to turn his passion into a new venture. He had already held 63 patents across multiple industries when he decided his next act would be building the world’s first artificial heart. He approached Dr. Albert Starr, a cardiac surgeon, put up $5,000 of his own money and got to work. The goal of a fully mechanical heart proved too ambitious for the moment, but what they produced instead changed medicine permanently. The Starr-Edwards mitral valve, implanted successfully for the first time on Sept. 21, 1960, was the first commercially available artificial heart valve ever made. To this day, almost seven decades later, Edwards remains one of the most important companies in the space. Edwards Laboratories was based in Santa Ana, California and it changed hands twice over the following decades. First, it was absorbed first by American Hospital Supply in 1966 and then by Baxter International in 1985. Baxter spun it off as an independent public company in 2000, and it has traded on the NYSE under the ticker EW ever since. What started as a retired engineer with $5,000 and a dream of mechanizing the human heart is now a $46 billion company that has helped treat more than two million cardiac patients worldwide. Pretty cool, right? Sean’s going to tell you about the modern-day fundamentals of the company and then I’ll be back with the technical read. Thanks for coming by! Best Stock Spotlight: Edwards Lifesciences Corp. (EW) Sean — Edwards Lifesciences is a medical device company focused on structural heart disease. The stock has been sideways for most of the past five years, but EW has been in a solid uptrend since bottoming in July 2024. This company studies, develops and sells therapies for patients with heart valve conditions. Growth is primarily driven by early disease identification, which has expanded their total addressable market. By no means are Josh and I comfortable speaking medical terminology – but their fundamentals are popping off the screen. Their newest heart-related therapies business is the fastest-growing segment, posting roughly 42% year-over-year growth in Q1 2026. Following a stronger-than-expected Q1 earnings report, Edwards raised its full-year 2026 guidance to 9%–11% in constant currency sales growth, implying revenue of $6.5 billion–$6.9 billion. Adjusted EPS guidance was lifted to $2.95–$3.05, with operating margin expected at the high end of the 28–29% range, roughly 150 basis points of expansion. Longer term, management reiterated a target of roughly 10% average annual sales growth in 2027 and beyond with 50–100 basis points of annual operating margin expansion, both things we like to see! Edwards Lifesciences checks the boxes that matter most for our momentum strategies — solid fundamentals, a meaningful growth tilt and a stock price beginning to confirm the story that the business is telling. This is the sweet spot for both our Best Stocks list and Porterhouse. Risk management Josh — Edwards spent the last six months building a base between $75 and $87, consolidating the gains it made coming off the October lows. That $87 level acted as a ceiling through the entire stretch from November into May, tested repeatedly without giving way. The breakout has now happened, and the retest is already in the books — price pulled back to the $81 area, held, and has since launched back toward the highs. With no overhead supply to contend with, the path of least resistance is up. I like these situations where a stock breaks out and takes a leg higher, then digests the move for a few months before the next breakout. When I see them, I pay attention. To me, it’s a sign of buyers cleaning up sellers until the sellers are done. The new high tells you that the people who wanted out have run out of shares to dispose of. It also tells us that the buyers have gotten more aggressive and are willing to pay higher than they had been a few quarters ago. When this lines up with a fundamental inflection higher, it’s a great set-up. RSI is reading 63, healthy momentum without any sign of exhaustion. The indicator has been making a pattern of higher readings since the February lows, confirming that buyers are getting more aggressive on each successive push. Traders can use a close back below $81 as their stop, the level where this retest found its footing. For investors, the 50-day and 200-day moving averages are converging at that same zone, and the clean bounce off it makes it the floor that matters. A violation there on a closing basis would change the character of this chart. DISCLOSURES: We currently own shares of EW for clients in our Porterhouse strategy. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
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