Each stock in this article is trading near its 52-week high. These elevated prices usually indicate some degree of investor confidence, business improvements, or favorable market conditions.
While momentum can be a leading indicator, it has burned many investors as it doesn’t always correlate with long-term success. All that said, here are three stocks getting more buzz than they deserve and some you should buy instead.
Knowles (KN)
One-Month Return: +13.3%
With roots dating back to 1946 and a focus on components that must perform flawlessly in critical situations, Knowles (NYSE: KN) designs and manufactures specialized electronic components like high-performance capacitors, microphones, and speakers for medical technology, defense, and industrial applications.
Why Do We Avoid KN?
- Annual sales declines of 4.9% for the past five years show its products and services struggled to connect with the market during this cycle
- Smaller revenue base of $593.2 million means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
Knowles is trading at $27.24 per share, or 21.9x forward P/E. Check out our free in-depth research report to learn more about why KN doesn’t pass our bar.
Aflac (AFL)
One-Month Return: +3.9%
Known for its iconic duck mascot that has quacked "Aflac!" in commercials since 2000, Aflac (NYSE: AFL) provides supplemental health and life insurance policies that pay cash benefits directly to policyholders for expenses not covered by their primary insurance.
Why Do We Pass on AFL?
- Net premiums earned contracted by 6.2% annually over the last five years, showing unfavorable market dynamics this cycle
- Operational productivity has decreased over the last two years as its combined ratio worsened by 10.8 percentage points
- Estimated book value per share decline of 2.6% for the next 12 months implies a challenging profitability environment
Aflac’s stock price of $113.54 implies a valuation ratio of 2x forward P/B. If you’re considering AFL for your portfolio, see our FREE research report to learn more.
Stellar Bancorp (STEL)
One-Month Return: +21%
Created through strategic mergers to serve the growing Texas business community, Stellar Bancorp (NYSE: STEL) is a Texas bank holding company that provides commercial banking services primarily to small and medium-sized businesses and professionals.
Why Are We Out on STEL?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 4.2% annually over the last two years
- Concessions to defend its market share have ramped up over the last two years as its net interest margin decreased by 35.6 basis points (100 basis points = 1 percentage point)
- Earnings per share decreased by more than its revenue over the last two years, showing each sale was less profitable
At $38.58 per share, Stellar Bancorp trades at 1.1x forward P/B. Read our free research report to see why you should think twice about including STEL in your portfolio.
Stocks We Like More
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check 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 244% over the last five years (as of June 30, 2025).
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.
