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.
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 are three stocks getting more buzz than they deserve and some you should buy instead.
Kulicke and Soffa (KLIC)
One-Month Return: +35.1%
Headquartered in Singapore, Kulicke & Soffa (NASDAQ: KLIC) is a provider of production equipment and tools used to assemble semiconductor devices
Why Does KLIC 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 five years
- Operating profits fell over the last five years as its sales dropped and it struggled to adjust its fixed costs
- Performance over the past five years shows each sale was less profitable as its earnings per share dropped by 29.8% annually, worse than its revenue
Kulicke and Soffa is trading at $83.50 per share, or 29.5x forward P/E. Read our free research report to see why you should think twice about including KLIC in your portfolio.
Hain Celestial (HAIN)
One-Month Return: +16.9%
Sold in over 75 countries around the world, Hain Celestial (NASDAQ:HAIN) is a natural and organic food company whose products range from snacks to teas to baby food.
Why Are We Out on HAIN?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Earnings per share decreased by more than its revenue over the last three years, showing each sale was less profitable
- High net-debt-to-EBITDA ratio of 7× increases the risk of forced asset sales or dilutive financing if operational performance weakens
At $0.74 per share, Hain Celestial trades at 43x forward P/E. Check out our free in-depth research report to learn more about why HAIN doesn’t pass our bar.
First American Financial (FAF)
One-Month Return: +20.6%
Tracing its roots back to 1889 when California was experiencing its first major real estate boom, First American Financial (NYSE:FAF) provides title insurance, settlement services, and risk solutions for residential and commercial real estate transactions across the United States and internationally.
Why Do We Think Twice About FAF?
- Insurance offerings faced market headwinds this cycle, reflected in stagnant net premiums earned over the last five years
- Earnings growth over the last five years fell short of the peer group average as its EPS only increased by 1.4% annually
- Annual book value per share growth of 3.6% over the last five years was below our standards for the insurance sector
First American Financial’s stock price of $71.83 implies a valuation ratio of 1.2x forward P/B. Read our free research report to see why you should think twice about including FAF in your portfolio.
High-Quality Stocks for All Market Conditions
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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.