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.
But not every company with momentum is a long-term winner, and plenty of investors have lost money betting on short-term fads. All that said, here are three stocks getting more buzz than they deserve and some you should buy instead.
Service International (SCI)
One-Month Return: -3.3%
Founded in 1962, Service International (NYSE: SCI) is a leading provider of death care products and services in North America.
Why Do We Think SCI Will Underperform?
- Number of funeral services performed has disappointed over the past two years, indicating weak demand for its offerings
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
Service International’s stock price of $83.36 implies a valuation ratio of 18.9x forward P/E. Check out our free in-depth research report to learn more about why SCI doesn’t pass our bar.
Hartford (HIG)
One-Month Return: -2.4%
Recognizable by its iconic stag logo that dates back to 1810, The Hartford (NYSE:HIG) provides property and casualty insurance, group benefits, and investment products to individuals and businesses across the United States.
Why Does HIG Fall Short?
- Scale presents growth limitations compared to smaller competitors, evidenced by its below-average 5.2% annualized growth in net premiums earned for the last two years
- Estimated sales growth of 2.6% for the next 12 months implies demand will slow from its two-year trend
- Large asset base makes it harder to grow book value per share quickly, and its annual book value per share growth of 6.7% over the last five years was below our standards for the insurance sector
At $138.46 per share, Hartford trades at 1.8x forward P/B. To fully understand why you should be careful with HIG, check out our full research report (it’s free).
Penske Automotive Group (PAG)
One-Month Return: -0.1%
With a diverse global network spanning the US, UK, Canada, Germany, Italy, Japan, and Australia, Penske Automotive Group (NYSE:PAG) operates automotive and commercial truck dealerships across the globe, selling new and used vehicles while providing service, parts, and financing options.
Why Are We Bearish on PAG?
- Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
- Gross margin of 13% is an output of its commoditized inventory
- Performance over the past three years shows its incremental sales were much less profitable, as its earnings per share fell by 10.1% annually
Penske Automotive Group is trading at $217.06 per share, or 15.7x forward P/E. Dive into our free research report to see why there are better opportunities than PAG.
High-Quality Stocks for All Market Conditions
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.