The stocks in this article are all trading near their 52-week highs. This strength often reflects positive developments such as new product launches, favorable industry trends, or improved financial performance.
While momentum can be a leading indicator, it has burned many investors as it doesn’t always correlate with long-term success. On that note, here are three stocks getting more buzz than they deserve and some you should buy instead.
Starbucks (SBUX)
One-Month Return: -4.6%
Started by three friends in Seattle’s historic Pike Place Market, Starbucks (NASDAQ: SBUX) is a globally-renowned coffeehouse chain that offers a wide selection of high-quality coffee, beverages, and food items.
Why Do We Think Twice About SBUX?
- Poor same-store sales performance over the past two years indicates it’s having trouble bringing new diners into its restaurants
- Sales are projected to tank by 2.6% over the next 12 months as demand evaporates
- Efficiency has decreased over the last year as its operating margin fell by 4.9 percentage points
At $101.69 per share, Starbucks trades at 38x forward P/E. Dive into our free research report to see why there are better opportunities than SBUX.
Gates Industrial Corporation (GTES)
One-Month Return: +13.5%
Helping create one of the most memorable moments for the iconic “Jurassic Park” film, Gates (NYSE: GTES) offers power transmission and fluid transfer equipment for various industries.
Why Are We Hesitant About GTES?
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 3.5% annually
- Underwhelming 7% return on capital reflects management’s difficulties in finding profitable growth opportunities
Gates Industrial Corporation’s stock price of $27.35 implies a valuation ratio of 1.9x forward price-to-sales. If you’re considering GTES for your portfolio, see our FREE research report to learn more.
Clear Channel Outdoor (CCO)
One-Month Return: +0.2%
With thousands of digital and traditional displays lighting up America's highways, city streets, and airports, Clear Channel Outdoor (NYSE: CCO) operates billboards, street furniture, and airport displays, connecting advertisers with millions of consumers across the US.
Why Does CCO Give Us Pause?
- Annual sales declines of 2.9% for the past five years show its products and services struggled to connect with the market during this cycle
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
Clear Channel Outdoor is trading at $2.39 per share, or 13.9x forward EV-to-EBITDA. To fully understand why you should be careful with CCO, check out our full research report (it’s free).
Stocks We Like More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
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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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
