10 Best High Quality Stocks With Great Momentum for January 2026
Welcome to the Value Sense Blog, your resource for insights on the stock market! At Value Sense, we focus on intrinsic value tools and offer stock ideas with undervalued companies. Dive into our research products and learn more about our unique approach at valuesense.io
Explore diverse stock ideas covering technology, healthcare, and commodities sectors. Our insights are crafted to help investors spot opportunities in undervalued growth stocks, enhancing potential returns. Visit us to see evaluations and in-depth market research.
Market Overview & Selection Criteria
In the current market environment, investors seek high-quality stocks with strong fundamentals amid volatility in technology, healthcare, and consumer sectors. This stock watchlist features 10 stocks selected using ValueSense's advanced screening criteria, focusing on Quality rating: 10.0 across all picks—the platform's top score indicating superior business quality. Selection methodology emphasizes intrinsic value comparisons, revenue growth, profitability metrics like FCF margins and ROIC, alongside balance sheet health via Total Debt to Equity. These top stocks to buy now represent best value stocks spanning software (WDAY), consumer health (HLN), biotech (AAPG), apparel (KTB), AI tech (RZLV), industrial (MAGN), beauty (WALD), diversified services (SOS), energy storage (ZOOZ), and holdings (XTKG). ValueSense data highlights undervaluation where intrinsic value exceeds implied market pricing, offering educational insights for investment opportunities in undervalued stocks.
Featured Stock Analysis
Stock #1: Workday, Inc. (WDAY)
| Metric | Value |
|---|---|
| Market Cap | $54.4B |
| Quality Rating | 10.0 |
| Intrinsic Value | $218.6 |
| 1Y Return | -18.3% |
| Revenue | $9,216.0M |
| Free Cash Flow | $2,585.0M |
| Revenue Growth | 3.4% |
| FCF margin | 28.0% |
| Gross margin | 77.5% |
| ROIC | 8.1% |
| Total Debt to Equity | 42.7% |
Investment Thesis
Workday, Inc. (WDAY) stands out with a Quality rating of 10.0 and a robust Market Cap of $54.4B, showcasing enterprise cloud software strength. The company's Intrinsic value of $218.6 suggests significant undervaluation potential based on ValueSense calculations. Despite a 1Y Return of -18.3%, fundamentals remain solid with Revenue at $9,216.0M and impressive Free Cash Flow of $2,585.0M, yielding a healthy FCF margin of 28.0%. Gross margin at 77.5% reflects pricing power, while ROIC of 8.1% indicates efficient capital use. Total Debt to Equity of 42.7% supports financial stability, positioning WDAY as a WDAY analysis highlight for long-term value in the tech sector.
This analysis reveals steady Revenue growth of 3.4%, underscoring reliable recurring revenue from HR and finance applications amid economic shifts.
Key Catalysts
- Strong Gross margin 77.5% driving profitability in SaaS model
- Positive Free Cash Flow $2,585.0M enabling R&D and buybacks
- High Quality rating 10.0 signaling competitive moat
Risk Factors
- Modest Revenue growth 3.4% vulnerable to economic slowdowns
- Negative 1Y Return -18.3% reflecting market sentiment pressures
- Moderate Total Debt to Equity 42.7% in rising rate environment
Stock #2: Haleon plc (HLN)
| Metric | Value |
|---|---|
| Market Cap | $45.3B |
| Quality Rating | 10.0 |
| Intrinsic Value | $13.0 |
| 1Y Return | 5.9% |
| Revenue | £13.8B |
| Free Cash Flow | £1,396.5M |
| Revenue Growth | 22.2% |
| FCF margin | 10.1% |
| Gross margin | 63.2% |
| ROIC | 8.4% |
| Total Debt to Equity | 52.8% |
Investment Thesis
Haleon plc (HLN), with a Market Cap of $45.3B and Quality rating 10.0, operates in consumer healthcare, showing Intrinsic value at $13.0. Positive 1Y Return of 5.9% contrasts sector peers, backed by Revenue of £13.8B and Free Cash Flow of £1,396.5M (FCF margin 10.1%). Revenue growth of 22.2% highlights expansion in oral care and pain relief, with Gross margin 63.2% and ROIC 8.4%. Total Debt to Equity at 52.8% is manageable, making HLN a defensive HLN analysis pick in healthcare stock picks.
Strong margins support sustained growth in essential products, positioning Haleon for resilient performance.
Key Catalysts
- Robust Revenue growth 22.2% from brand portfolio
- Solid ROIC 8.4% indicating capital efficiency
- Positive 1Y Return 5.9% amid market stability
Risk Factors
- Elevated Total Debt to Equity 52.8% post-spinoff
- Currency exposure in £-denominated metrics
- Competitive consumer health landscape
Stock #3: Ascentage Pharma Group International (AAPG)
| Metric | Value |
|---|---|
| Market Cap | $8,967.4M |
| Quality Rating | 10.0 |
| Intrinsic Value | $1.0 |
| 1Y Return | 51.7% |
| Revenue | CN¥802.5M |
| Free Cash Flow | CN¥49.8M |
| Revenue Growth | 63.4% |
| FCF margin | 6.2% |
| Gross margin | 94.6% |
| ROIC | (106.6%) |
| Total Debt to Equity | 253.9% |
Investment Thesis
Ascentage Pharma Group International (AAPG) boasts a Market Cap of $8,967.4M and Quality rating 10.0, with Intrinsic value $1.0 amid biotech innovation. Strong 1Y Return of 51.7% reflects momentum, driven by Revenue CN¥802.5M and Free Cash Flow CN¥49.8M (FCF margin 6.2%). Explosive Revenue growth 63.4% and Gross margin 94.6% highlight R&D pipeline potential, despite negative ROIC -106.6% typical for growth-stage biotech. High Total Debt to Equity 253.9% warrants monitoring, but offers AAPG analysis for high-upside biotech stock picks.
Key Catalysts
- Exceptional Revenue growth 63.4% from drug approvals
- High Gross margin 94.6% in pharma IP
- Strong 1Y Return 51.7% signaling pipeline success
Risk Factors
- Negative ROIC -106.6% from heavy investments
- Very high Total Debt to Equity 253.9%
- Clinical trial uncertainties
Stock #4: Kontoor Brands, Inc. (KTB)
| Metric | Value |
|---|---|
| Market Cap | $3,398.4M |
| Quality Rating | 10.0 |
| Intrinsic Value | $72.7 |
| 1Y Return | -27.1% |
| Revenue | $2,987.6M |
| Free Cash Flow | ($13.2M) |
| Revenue Growth | 14.5% |
| FCF margin | (0.4%) |
| Gross margin | 46.2% |
| ROIC | 11.5% |
| Total Debt to Equity | 283.3% |
Investment Thesis
Kontoor Brands, Inc. (KTB), Market Cap $3,398.4M and Quality rating 10.0, focuses on apparel with Intrinsic value $72.7. 1Y Return -27.1% presents entry point, with Revenue $2,987.6M and slight negative Free Cash Flow ($13.2M, FCF margin -0.4%). Revenue growth 14.5%, Gross margin 46.2%, and solid ROIC 11.5% support denim leadership. High Total Debt to Equity 283.3% is a focus, but enables KTB analysis in consumer cyclicals.
Key Catalysts
- Healthy ROIC 11.5% from brand strength
- Revenue expansion 14.5% in key markets
- Attractive Intrinsic value upside
Risk Factors
- Negative Free Cash Flow and margin pressures
- High Total Debt to Equity 283.3%
- Negative 1Y Return -27.1%
Most investors waste time on the wrong metrics. We've spent 10,000+ hours perfecting our value investing engine to find what actually matters.
Want to see what we'll uncover next - before everyone else does?
Find Hidden Gems First!
Stock #5: Rezolve AI PLC (RZLV)
| Metric | Value |
|---|---|
| Market Cap | $667.6M |
| Quality Rating | 10.0 |
| Intrinsic Value | $4.3 |
| 1Y Return | -29.8% |
| Revenue | $6,451.3K |
| Free Cash Flow | ($36.6M) |
| Revenue Growth | N/A |
| FCF margin | (568.0%) |
| Gross margin | 95.4% |
| ROIC | (470.8%) |
| Total Debt to Equity | (248.8%) |
Investment Thesis
Rezolve AI PLC (RZLV), Market Cap $667.6M, Quality rating 10.0, targets AI commerce with Intrinsic value $4.3. 1Y Return -29.8% amid scaling, Revenue $6,451.3K, negative Free Cash Flow ($36.6M, FCF margin -568.0%). High Gross margin 95.4% but poor ROIC -470.8% and Total Debt to Equity -248.8% reflect early-stage dynamics, positioning for RZLV analysis in AI growth.
Key Catalysts
- Exceptional Gross margin 95.4% in software
- AI sector tailwinds for adoption
- Quality rating 10.0 validation
Risk Factors
- Severe negative FCF margin -568.0%
- Poor ROIC -470.8%
- Revenue scale challenges (N/A growth)
Stock #6: Magnera Corp. (MAGN)
| Metric | Value |
|---|---|
| Market Cap | $521.0M |
| Quality Rating | 10.0 |
| Intrinsic Value | $88.5 |
| 1Y Return | -20.9% |
| Revenue | $3,356.0M |
| Free Cash Flow | $324.0M |
| Revenue Growth | 5.7% |
| FCF margin | 9.7% |
| Gross margin | 4.7% |
| ROIC | 3.6% |
| Total Debt to Equity | 189.4% |
Investment Thesis
Magnera Corp. (MAGN), Market Cap $521.0M, Quality rating 10.0, shows Intrinsic value $88.5. 1Y Return -20.9%, Revenue $3,356.0M, positive Free Cash Flow $324.0M (FCF margin 9.7%). Low Gross margin 4.7% but ROIC 3.6% and Total Debt to Equity 189.4% support industrial operations for MAGN analysis.
Key Catalysts
- Positive Free Cash Flow generation
- Steady Revenue growth 5.7%
- Undervalued Intrinsic value
Risk Factors
- Low Gross margin 4.7%
- High leverage (189.4% Debt/Equity)
- Negative 1Y performance
Stock #7: Waldencast plc (WALD)
| Metric | Value |
|---|---|
| Market Cap | $204.7M |
| Quality Rating | 10.0 |
| Intrinsic Value | $28.6 |
| 1Y Return | -54.0% |
| Revenue | $539.1M |
| Free Cash Flow | ($33.4M) |
| Revenue Growth | 67.3% |
| FCF margin | (6.2%) |
| Gross margin | 52.8% |
| ROIC | (12.0%) |
| Total Debt to Equity | 35.2% |
Investment Thesis
Waldencast plc (WALD), Market Cap $204.7M, Quality rating 10.0, Intrinsic value $28.6 in beauty. 1Y Return -54.0%, Revenue $539.1M growing 67.3%, negative Free Cash Flow ($33.4M, FCF margin -6.2%). Gross margin 52.8%, ROIC -12.0%, Total Debt to Equity 35.2% for WALD analysis.
Key Catalysts
- High Revenue growth 67.3%
- Improving Gross margin 52.8%
- Merger-driven synergies
Risk Factors
- Negative ROIC and cash flow
- Sharp 1Y decline -54.0%
- Integration risks
Stock #8: SOS Limited (SOS)
| Metric | Value |
|---|---|
| Market Cap | $10.0M |
| Quality Rating | 10.0 |
| Intrinsic Value | $199.3 |
| 1Y Return | -78.6% |
| Revenue | $260.5M |
| Free Cash Flow | ($240.4B) |
| Revenue Growth | 89.4% |
| FCF margin | (92,273.1%) |
| Gross margin | 1.3% |
| ROIC | (68.8%) |
| Total Debt to Equity | 0.0% |
Investment Thesis
SOS Limited (SOS), micro-cap Market Cap $10.0M, Quality rating 10.0, extreme Intrinsic value $199.3. 1Y Return -78.6%, Revenue $260.5M up 89.4%, massive negative Free Cash Flow ($240.4B, FCF margin -92,273.1%). Low Gross margin 1.3%, ROIC -68.8%, no debt for speculative SOS analysis.
Key Catalysts
- Explosive Revenue growth 89.4%
- Zero Total Debt to Equity
- Massive Intrinsic value potential
Risk Factors
- Extreme negative Free Cash Flow
- Poor ROIC -68.8%
- Volatility in small cap
Stock #9: ZOOZ Power Limited (ZOOZ)
| Metric | Value |
|---|---|
| Market Cap | $5,312.6K |
| Quality Rating | 10.0 |
| Intrinsic Value | $1.2 |
| 1Y Return | -79.9% |
| Revenue | $1,148.7K |
| Free Cash Flow | ($14.6M) |
| Revenue Growth | 11.6% |
| FCF margin | (1,271.5%) |
| Gross margin | (235.4%) |
| ROIC | (770.7%) |
| Total Debt to Equity | (2,708.2%) |
Investment Thesis
ZOOZ Power Limited (ZOOZ), tiny Market Cap $5,312.6K, Quality rating 10.0, Intrinsic value $1.2. 1Y Return -79.9%, Revenue $1,148.7K up 11.6%, negative Free Cash Flow ($14.6M, FCF margin -1,271.5%). Negative Gross margin -235.4%, ROIC -770.7%, extreme Total Debt to Equity -2,708.2% for energy tech ZOOZ analysis.
Key Catalysts
- Niche battery tech growth
- Revenue growth 11.6%
- High Quality rating
Risk Factors
- Negative margins across board
- Severe ROIC loss
- Micro-cap illiquidity
Stock #10: X3 Holdings Co Ltd. (XTKG)
| Metric | Value |
|---|---|
| Market Cap | $272.5K |
| Quality Rating | 10.0 |
| Intrinsic Value | $116.6K |
| 1Y Return | -71.7% |
| Revenue | $12.1M |
| Free Cash Flow | ($3,710.9K) |
| Revenue Growth | (37.4%) |
| FCF margin | (30.7%) |
| Gross margin | 12.8% |
| ROIC | (324.4%) |
| Total Debt to Equity | 8.8% |
Investment Thesis
X3 Holdings Co Ltd. (XTKG), Market Cap $272.5K, Quality rating 10.0, outlier Intrinsic value $116.6K. 1Y Return -71.7%, Revenue $12.1M down 37.4%, negative Free Cash Flow ($3,710.9K, FCF margin -30.7%). Gross margin 12.8%, ROIC -324.4%, low Total Debt to Equity 8.8% for XTKG analysis.
Key Catalysts
- Low debt burden
- Potential turnaround in holdings
- Quality rating outlier
Risk Factors
- Declining Revenue growth -37.4%
- Negative ROIC and cash flow
- Extreme small size risks
Portfolio Diversification Insights
This stock watchlist offers diversification across market caps (large-cap WDAY/HLN to micro-caps like XTKG) and sectors: tech/software (WDAY, RZLV), healthcare/biotech (HLN, AAPG), consumer/apparel (KTB, WALD, MAGN), services/energy (SOS, ZOOZ, XTKG). Larger caps provide stability with positive FCF (e.g., WDAY's 28% margin), while small-caps offer growth (AAPG 63.4% revenue). Balance 60% in top-3 for quality, 40% in high-growth like WALD/SOS. Cross-references: Tech exposure via WDAY/RZLV complements biotech upside in AAPG; avoid over-allocating to negative ROIC names like ZOOZ.
Market Timing & Entry Strategies
Consider positions when prices approach Intrinsic value floors (e.g., WDAY near $218.6). Dollar-cost average into high-conviction like HLN amid pullbacks, monitor revenue growth streaks (AAPG 63.4%). Use ValueSense screeners for momentum shifts; enter small-caps cautiously on volume spikes. Track ROIC improvements and debt metrics quarterly.
Explore More Investment Opportunities
For investors seeking undervalued companies with high fundamental quality, our analytics team provides curated stock lists:
📌 50 Undervalued Stocks (Best overall value plays for 2025)
📌 50 Undervalued Dividend Stocks (For income-focused investors)
📌 50 Undervalued Growth Stocks (High-growth potential with strong fundamentals)
🔍 Check out these stocks on the Value Sense platform for free!
More Articles You Might Like
- Nelson Peltz - Trian Fund Management Portfolio Q3'2025: Top Holdings & Recent Changes
- Principles for Dealing with the Changing World Order by Ray Dalio
- The Ascent of Money by Niall Ferguson
- Principles for Navigating Big Debt Crises by Ray Dalio
- Influence: The Psychology of Persuasion by Robert B. Cialdini Ph.D.
FAQ Section
How were these stocks selected?
These 10 best stock picks were filtered via ValueSense for Quality rating 10.0, prioritizing intrinsic value, growth, and profitability metrics like ROIC and FCF margins for comprehensive stock analysis.
What's the best stock from this list?
Workday (WDAY) leads with strong FCF $2,585.0M and margins, but HLN offers defensive appeal; selection depends on risk tolerance in this investment opportunities set.
Should I buy all these stocks or diversify?
Diversify across sectors like tech (WDAY) and healthcare (AAPG) rather than all-in; allocate by market cap for balanced portfolio diversification insights.
What are the biggest risks with these picks?
Key concerns include high debt (e.g., AAPG 253.9%), negative FCF/ROIC in small-caps (RZLV, ZOOZ), and 1Y declines; monitor via ValueSense health ratings.
When is the best time to invest in these stocks?
Target entries near Intrinsic value levels (e.g., MAGN $88.5) during market dips, using Market Timing & Entry Strategies like averaging on growth confirmations.