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.
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.
Teradyne (TER)
One-Month Return: +30.4%
Sporting most major chip manufacturers as its customers, Teradyne (NASDAQ: TER) is a US-based supplier of automated test equipment for semiconductors as well as other technologies and devices.
Why Does TER Give Us Pause?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 1.1% annually over the last five years
- Earnings per share decreased by more than its revenue over the last five years, showing each sale was less profitable
- 8.8 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
Teradyne’s stock price of $179.50 implies a valuation ratio of 35.9x forward P/E. Dive into our free research report to see why there are better opportunities than TER.
Perma-Fix (PESI)
One-Month Return: +38.7%
Tackling hazardous waste challenges since 1990, Perma-Fix (NASDAQ: PESI) provides environmental waste treatment services.
Why Should You Sell PESI?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 8.1% annually over the last five years
- Free cash flow margin dropped by 31.6 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
Perma-Fix is trading at $14.01 per share, or 3.2x forward price-to-sales. To fully understand why you should be careful with PESI, check out our full research report (it’s free for active Edge members).
Guardant Health (GH)
One-Month Return: +47.9%
Pioneering the field of "liquid biopsy" with technology that can identify cancer-specific genetic mutations from a simple blood draw, Guardant Health (NASDAQ: GH) develops blood tests that detect and monitor cancer by analyzing tumor DNA in the bloodstream, helping doctors make treatment decisions without invasive biopsies.
Why Does GH Fall Short?
- Earnings per share fell by 18.5% annually over the last five years while its revenue grew, partly because it diluted shareholders
- Cash burn makes us question whether it can achieve sustainable long-term growth
- Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders
At $92.41 per share, Guardant Health trades at 10x forward price-to-sales. Read our free research report to see why you should think twice about including GH in your portfolio.
High-Quality Stocks for All Market Conditions
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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