The stocks featured in this article have all approached their 52-week highs. When these price levels hit, it typically signals strong business execution, positive market sentiment, or significant industry tailwinds.
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.
Domo (DOMO)
One-Month Return: +78.1%
Founded by Josh James after selling his former business Omniture to Adobe, Domo (NASDAQ: DOMO) provides business intelligence software that allows managers to access and visualize critical business metrics in real-time, using their smartphones.
Why Are We Out on DOMO?
- Offerings couldn’t generate interest over the last year as its billings have averaged 2.4% declines
- Customer acquisition costs take a while to recoup, making it difficult to justify sales and marketing investments that could increase revenue
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
Domo’s stock price of $13.75 implies a valuation ratio of 1.7x forward price-to-sales. Check out our free in-depth research report to learn more about why DOMO doesn’t pass our bar.
Allient (ALNT)
One-Month Return: +46%
Founded in 1962, Allient (NASDAQ: ALNT) develops and manufactures precision and specialty-controlled motion components and systems.
Why Do We Avoid ALNT?
- Annual sales declines of 1.7% for the past two years show its products and services struggled to connect with the market during this cycle
- Projected sales growth of 3.7% for the next 12 months suggests sluggish demand
- Issuance of new shares over the last two years caused its earnings per share to fall by 16% annually, even worse than its revenue declines
At $31.74 per share, Allient trades at 16.6x forward P/E. Read our free research report to see why you should think twice about including ALNT in your portfolio.
Sanmina (SANM)
One-Month Return: +12.2%
Founded in 1980, Sanmina (NASDAQ: SANM) is an electronics manufacturing services company offering end-to-end solutions for various industries.
Why Do We Pass on SANM?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 6.2% annually over the last two years
- Competitive supply chain dynamics and steep production costs are reflected in its low gross margin of 8.2%
- Earnings per share have contracted by 4.2% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
Sanmina is trading at $88.46 per share, or 13.1x forward P/E. If you’re considering SANM for your portfolio, see our FREE research report to learn more.
Stocks We Like More
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free.
