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. All that said, here are three stocks getting more buzz than they deserve and some you should buy instead.

Himax (HIMX)

One-Month Return: +32.1%

Taiwan-based Himax Technologies (NASDAQ: HIMX) is a leading manufacturer of display driver chips and timing controllers used in TVs, laptops, and mobile phones.

Why Should You Dump HIMX?

1. Annual sales declines of 1.3% for the past five years show its products and services struggled to connect with the market during this cycle
2. Gross margin of 30.5% reflects its high production costs
3. Overall productivity fell over the last five years as its plummeting sales were accompanied by a decline in its operating margin

Himax’s stock price of $9.98 implies a valuation ratio of 42.2x forward P/E. If you’re considering HIMX for your portfolio, see our FREE research report to learn more.

Smith & Wesson (SWBI)

One-Month Return: +18.8%

With a history dating back to 1852, Smith & Wesson (NASDAQ: SWBI) is a firearms manufacturer known for its handguns and rifles.

Why Do We Think SWBI Will Underperform?

1. Sales tumbled by 12.2% annually over the last five years, showing consumer trends are working against its favor
2. Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 3.1% for the last two years
3. Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions

Smith & Wesson is trading at $13.93 per share, or 43.4x forward P/E. To fully understand why you should be careful with SWBI, check out our full research report (it’s free).

Masimo (MASI)

One-Month Return: +0.5%

Founded in 1989 to solve the "unsolvable problem" of accurate pulse oximetry during patient movement, Masimo (NASDAQ: MASI) develops and manufactures noninvasive patient monitoring technologies, including its breakthrough pulse oximetry systems that accurately measure blood oxygen levels even during patient movement.

Why Are We Cautious About MASI?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 16.3% annually over the last two years
2. Subscale operations are evident in its revenue base of $1.48 billion, meaning it has fewer distribution channels than its larger rivals
3. Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned

At $175.49 per share, Masimo trades at 30.6x forward P/E. Dive into our free research report to see why there are better opportunities than MASI.

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 meeting 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.