This article will look into the 10 best short-term stocks with a buying opportunity for investors.
Thrilling highs, daunting lows, and the energized chase after the next big opportunity – this thoroughly defines the current stock market. In this roller coaster ride, momentum investing is an often-seen strategy piquing the investors’ interest, which involves capitalizing on continuing existing market trends. The approach holds onto the hope that high performers in the past will continue to perform better in the future as well. A curious subset within the strategy is the price momentum stocks, whose recent downturns are seen as an opportunity as they show potential for a swift rebound.
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2025 has started with many changes, leading to complications in the U.S. stock market. The political changes, including the change in the U.S.’s stand in the Ukraine-Russia war, tariff changes leaning towards unfavorable imports, and the advent of artificial intelligence (AI) models from foreign countries, have brought down the stock value of many dominating leaders in the industry. For instance, CNBC reported a $750 billion drop in the tech industry’s Magnificent 7’s value as of March 10, 2025, owing to new tariffs. However, this decline has been attributed more to institutional selling than fundamental weaknesses. Discerning investors perceive it as a potential opportunity.
It is not just the tech giants feeling the heat. Price momentum stocks with negative one-year returns in the broader market continue to attract investors’ interest despite the fluctuations in the market. Despite the decline over the past year, these stocks have shown positive momentum in more recent periods, getting the attention of many analysts in the market. Such patterns are common in companies that underwent a restructuring, launched a promising product, or benefited from favorable market conditions. To identify these stocks, we must be willing to go deeper beyond the surface-level metrics, and hence, we present this article to you.
Before going into the article, however, investors are asked to approach the momentum investing strategy with caution. The strategy, particularly concerning stocks with recent negative returns, can be like walking a tightrope. We must consider the possibility of the factors that led to their decline, resurfacing in the future, or the short life of the recent positive momentum. Hence, in addition to the information we share in our article, thorough research alongside a well-defined exit strategy is highly recommended.
The pursuit of high returns can be tempting. Hence, investors are suggested to estimate the risk tolerance levels and long-term objectives and align them with their investment decisions. Even during tough times, the stock market presents investors with many opportunities. Discernment and prudence are required to make informed investment decisions that provide the best chance of generating an optimal return for your investment. With this in mind, let’s unveil our list.
Please stick with us as we count down our list of the 10 best short-term stocks from 10 to 1. The top 5 may challenge your investment decisions.
A person holding a cup of coffee while reading stock market data on the phone. Photo by Anna Nekrashevich on Pexels
Our Methodology
We have used three key criteria to identify the 10 best short-term momentum stocks: a minimum decline of 30% over the past year, a minimum gain of 7.5% in the past month, and average daily trading volume of at least 100,000 shares. In addition, we have considered technical indicators focusing on stocks that recently crossed above their 20-day Simple Moving Average (SMA) and where the 20-day SMA exceeds the 200-day SMA, which signals a potential upward trend. To rank the list, we used the one-month returns. With it, we prioritized the most recent momentum performers. We have also considered the hedge fund interest from Insider Monkey’s Q4 2024 database for each stock on our list to project the level of market backing.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10. Dream Finders Homes, Inc. (NYSE:DFH)
Last 52 weeks return: -35.73%
Last 1 month’s return: 7.69%
No. of hedge fund portfolios: 13
Dream Finders Homes, Inc. (NYSE:DFH) is a national homebuilder specializing in customizable, high-quality residential properties headquartered in Jacksonville, Florida. The company operates across multiple U.S. markets, catering to first-time and move-up homebuyers with competitively priced homes. Dream Finders Homes, unlike mass-production builders, adopts a low-overhead, asset-light business model and concentrates on personalized homes.
Dream Finders Homes, Inc. (NYSE:DFH) has seen its stock price decline by 35.73% over the past year. In addition to the challenges in the housing market, the decline was due to a fall in the company’s gross margin and net income. Particularly during the third quarter, the financial items decreased 19.2% and 7%, respectively, despite a 10% rise in revenue, suggesting challenges in handling costs and expenses.
However, the last month has shown a modest rebound of 7.69%, suggesting renewed investor interest. The fourth quarter and full year 2024 results indicated that homebuilding revenues went up 35% to $1.5 billion and the net income up by 27% to $129 million, suggesting improved performance by Dream Finders Homes, Inc. (NYSE:DFH). The financial growth, amid market chaos, translated positively among the investors, resulting in the recent rise. The 20-day SMA has increased by 2.62%, indicating short-term optimism, crossing the 200-day SMA, which remains negative at 14.62%.
Despite the downturn, 13 hedge fund portfolios from the Insider Monkey database continue to hold positions in DFH at the end of Q4 2024, suggesting institutional confidence and a potential upside for short-term investors.
9. Brown-Forman Corporation (NYSE:BF-B)
Last 52 weeks return: -34.74%
Last 1 month’s return: 11.69%
No. of hedge fund portfolios: 38
Brown-Forman Corporation (NYSE:BF-B) is a U.S.-based spirits and wine company. The company focuses on producing, marketing, and selling various alcoholic beverage brands, including Jack Daniel’s, Woodford Reserve, and Old Forester. Their product portfolio includes whiskey, tequila, rum, gin, liqueur, wine, and ready-to-drink beverages. With corporate offices and production facilities across six continents, the company’s business operations reach over 170 countries.
Brown-Forman Corporation (NYSE:BF-B) experiences a decline of 34.74% in its yearly growth. The U.S. spirits market has seen a declining trend throughout 2024, making it challenging for brands like Tequila, Jimador, and Herradura to thrive in the U.S. and Mexico. The absence of the gain in the Finlandia vodka business sales further contributed to the decline.
However, in the past 1 month, as of March 14, 2025, Brown-Forman Corporation (NYSE:BF-B) saw an 11.69% increase in its value. The positive effect comes after the company’s announcement to engage in strategic initiatives, such as the sale of their mills and Cooperage in Alabama, to support the optimization of the wood supply chain, which is expected to deliver between $70 million and $80 million in annualized savings. SMA for 200 days experiences a decline of 16.61%. However, SMA for the last 20 days indicates a positive trend of 3.32%.
Institutional interest in Brown-Forman Corporation (NYSE:BF-B) remains high, with 38 hedge funds holding on to the stocks at the end of Q4 2024, suggesting the inclusion of the company in the 10 best short-term stocks.
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