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.
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.
Werner (WERN)
One-Month Return: +1.9%
Conducting business in over a 100 countries, Werner (NASDAQ: WERN) offers full-truckload, less-than-truckload, and intermodal delivery services.
Why Do We Think WERN Will Underperform?
- Sales tumbled by 2.3% annually over the last two years, showing market trends are working against it during this cycle
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 44.6% annually while its revenue grew
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
Werner’s stock price of $43.82 implies a valuation ratio of 37.4x forward P/E. Dive into our free research report to see why there are better opportunities than WERN.
Proto Labs (PRLB)
One-Month Return: -1.3%
Pioneering the concept of online quoting and manufacturing for custom prototypes and low-volume production parts, Proto Labs (NYSE: PRLB) offers injection molding, 3D printing, and sheet metal fabrication for manufacturers in various industries.
Why Do We Avoid PRLB?
- 3.9% annual revenue growth over the last two years was slower than its industrials peers
- Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
Proto Labs is trading at $77.20 per share, or 40.6x forward P/E. Check out our free in-depth research report to learn more about why PRLB doesn’t pass our bar.
Toll Brothers (TOL)
One-Month Return: +13.2%
Started by two brothers who started by building and selling just one home in Pennsylvania, today Toll Brothers (NYSE: TOL) is a luxury homebuilder across the United States.
Why Does TOL Give Us Pause?
- Product roadmap and go-to-market strategy need to be reconsidered as its backlog has averaged 9.1% declines over the past two years
- Projected sales decline of 2.9% for the next 12 months points to a tough demand environment ahead
- Earnings per share have contracted by 5.7% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
At $158.00 per share, Toll Brothers trades at 12.6x forward P/E. If you’re considering TOL for your portfolio, see our FREE research report to learn more.
Stocks We Like More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
