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.
Marvell Technology (MRVL)
One-Month Return: +3.4%
Moving away from a low margin storage device management chips in one of the biggest semiconductor business model pivots of the past decade, Marvell Technology (NASDAQ: MRVL) is a fabless designer of special purpose data processing and networking chips used by data centers, communications carriers, enterprises, and autos.
Why Is MRVL Not Exciting?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 1.3% annually over the last two years
- Historical operating losses point to an inefficient cost structure
- Push for growth has led to negative returns on capital, signaling value destruction, and its falling returns suggest its earlier profit pools are drying up
At $60.72 per share, Marvell Technology trades at 21.8x forward P/E. Check out our free in-depth research report to learn more about why MRVL doesn’t pass our bar.
Douglas Dynamics (PLOW)
One-Month Return: +12.1%
Once manufacturing snowplows designed for the iconic jeep vehicle precursor, Douglas Dynamics (NYSE: PLOW) offers snow and ice equipment for the roads and sidewalks.
Why Is PLOW Risky?
- Flat sales over the last two years suggest it must find different ways to grow during this cycle
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 2.4% annually while its revenue grew
- Free cash flow margin dropped by 5 percentage points over the last five years, implying the company became more capital intensive as competition picked up
Douglas Dynamics’s stock price of $26.97 implies a valuation ratio of 14x forward P/E. If you’re considering PLOW for your portfolio, see our FREE research report to learn more.
AdaptHealth (AHCO)
One-Month Return: +7.6%
With a network of approximately 680 locations serving patients across all 50 states, AdaptHealth (NASDAQ: AHCO) provides home medical equipment, supplies, and related services to patients with chronic conditions like sleep apnea, diabetes, and respiratory disorders.
Why Are We Cautious About AHCO?
- Muted 3.9% annual revenue growth over the last two years shows its demand lagged behind its healthcare peers
- ROIC of 1.2% reflects management’s challenges in identifying attractive investment opportunities, and its shrinking returns suggest its past profit sources are losing steam
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
AdaptHealth is trading at $8.78 per share, or 8.1x forward P/E. To fully understand why you should be careful with AHCO, check out our full research report (it’s free).
Stocks We Like More
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market 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 176% over the last five years.
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 Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free.
