Exciting developments are taking place for the stocks in this article. They’ve all surged ahead of the broader market over the last month as catalysts such as new products and positive media coverage have propelled their returns.
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.
Coupang (CPNG)
One-Month Return: +25.4%
Founded in 2010 by Harvard Business School student Bom Kim, Coupang (NYSE:CPNG) is an e-commerce giant often referred to as the "Amazon of South Korea".
Why Are We Hesitant About CPNG?
- Gross margin of 28% is below its competitors, leaving less money to invest in areas like marketing and R&D
- Low free cash flow margin of 4.4% for the last two years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
Coupang is trading at $26.93 per share, or 27.8x forward EV/EBITDA. If you’re considering CPNG for your portfolio, see our FREE research report to learn more.
BWX (BWXT)
One-Month Return: +3.6%
Contributing components and materials to the famous Manhattan Project in the 1940s, BWX (NYSE:BWXT) is a manufacturer and service provider of nuclear components and fuel for government and commercial industries.
Why Are We Cautious About BWXT?
- Annual revenue growth of 6.6% over the last five years was below our standards for the industrials sector
- Costs have risen faster than its revenue over the last five years, causing its operating margin to decline by 2.4 percentage points
- Earnings growth underperformed the sector average over the last five years as its EPS grew by just 3.8% annually
At $107.85 per share, BWX trades at 29.8x forward P/E. Check out our free in-depth research report to learn more about why BWXT doesn’t pass our bar.
Methode Electronics (MEI)
One-Month Return: +26.5%
Founded in 1946, Methode Electronics (NYSE:MEI) is a global supplier of custom-engineered solutions for Original Equipment Manufacturers (OEMs).
Why Do We Steer Clear of MEI?
- Flat sales over the last five years suggest it must find different ways to grow during this cycle
- Free cash flow margin dropped by 19.6 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
Methode Electronics’s stock price of $7.20 implies a valuation ratio of 11.3x forward P/E. Read our free research report to see why you should think twice about including MEI in your portfolio.
High-Quality Stocks for All Market Conditions
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 Growth Stocks for this month. 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free.