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.
However, not all companies with momentum are long-term winners, and many investors have lost money by following short-term trends. On that note, here are three stocks getting more buzz than they deserve and some you should buy instead.
Levi's (LEVI)
One-Month Return: +6.5%
Credited for inventing the first pair of blue jeans in 1873, Levi's (NYSE: LEVI) is an apparel company renowned for its iconic denim products and classic American style.
Why Do We Avoid LEVI?
- Weak constant currency growth over the past two years indicates challenges in maintaining its market share
- Capital intensity will likely ramp up in the next year as its free cash flow margin is expected to contract by 4.9 percentage points
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Levi's is trading at $24.68 per share, or 15.9x forward P/E. Read our free research report to see why you should think twice about including LEVI in your portfolio.
First Advantage (FA)
One-Month Return: +5.7%
Processing over 200 million screens annually across more than 200 countries and territories, First Advantage (NASDAQ: FA) provides employment background screening, identity verification, and compliance solutions to help companies manage hiring risks.
Why Does FA Give Us Pause?
- Earnings per share lagged its peers over the last four years as they only grew by 1.6% annually
- 7.9 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
- Below-average returns on capital indicate management struggled to find compelling investment opportunities, and its decreasing returns suggest its historical profit centers are aging
At $18.05 per share, First Advantage trades at 14.4x forward P/E. Dive into our free research report to see why there are better opportunities than FA.
Aflac (AFL)
One-Month Return: +4.6%
Known for its iconic duck mascot that has quacked "Aflac!" in commercials since 2000, Aflac (NYSE: AFL) provides supplemental health and life insurance policies that pay cash benefits directly to policyholders for expenses not covered by their primary insurance.
Why Do We Pass on AFL?
- 6.2% annual declines in net premiums earned for the past five years indicates policy sales struggled this cycle
- Projected book value per share decline of 4.8% for the next 12 months points to tough credit quality challenges ahead
- Elevated debt-to-equity ratio of 1.9× suggests the firm is overleveraged and may struggle to secure additional financing
Aflac’s stock price of $117.25 implies a valuation ratio of 2x forward P/B. To fully understand why you should be careful with AFL, check out our full research report (it’s free).
Stocks We Like More
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
