Each stock in this article is trading near its 52-week high. These elevated prices usually indicate some degree of investor confidence, business improvements, or favorable market conditions.
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 are three stocks getting more buzz than they deserve and some you should buy instead.
Gates Industrial Corporation (GTES)
One-Month Return: -0.9%
Helping create one of the most memorable moments for the iconic “Jurassic Park” film, Gates (NYSE: GTES) offers power transmission and fluid transfer equipment for various industries.
Why Is GTES Not Exciting?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Anticipated sales growth of 4.8% for the next year implies demand will be shaky
- Underwhelming 6.9% return on capital reflects management’s difficulties in finding profitable growth opportunities
At $24.07 per share, Gates Industrial Corporation trades at 15.8x forward P/E. To fully understand why you should be careful with GTES, check out our full research report (it’s free).
SS&C (SSNC)
One-Month Return: +5.6%
Founded in 1986 as a bridge between technology and financial services, SS&C Technologies (NASDAQ: SSNC) provides software and software-enabled services that help financial firms and healthcare organizations automate complex business processes.
Why Does SSNC Give Us Pause?
- Earnings per share lagged its peers over the last five years as they only grew by 7.1% annually
- Free cash flow margin dropped by 2.5 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
SS&C is trading at $87.90 per share, or 14.2x forward P/E. Dive into our free research report to see why there are better opportunities than SSNC.
Nasdaq (NDAQ)
One-Month Return: +6%
Originally founded in 1971 as the world's first electronic stock market, Nasdaq (NASDAQ: NDAQ) operates global exchanges and provides technology, data, and corporate services that help companies, investors, and financial institutions navigate capital markets.
Why Are We Wary of NDAQ?
- Performance over the past two years shows its incremental sales were less profitable, as its 7.4% annual earnings per share growth trailed its revenue gains
Nasdaq’s stock price of $94.63 implies a valuation ratio of 27.5x forward P/E. Read our free research report to see why you should think twice about including NDAQ in your portfolio.
Stocks We Like More
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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