The stocks featured in this article are seeing some big returns. Over the past month, they’ve outpaced the market due to some combination of positive news, upbeat results, or supportive macro developments. As such, investors are taking notice and bidding up shares.

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 that are likely overheated and some you should look into instead.

Mayville Engineering (MEC)

One-Month Return: +23.6%

Originally founded solely on tool and die manufacturing, Mayville Engineering Company (NYSE: MEC) specializes in metal fabrication, tube bending, and welding to be used in various industries.

Why Does MEC Worry Us?

1. Sales tumbled by 4.3% annually over the last two years, showing market trends are working against its favor during this cycle
2. Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
3. High net-debt-to-EBITDA ratio of 5× could force the company to raise capital at unfavorable terms if market conditions deteriorate

Mayville Engineering’s stock price of $25.61 implies a valuation ratio of 54.2x forward P/E. To fully understand why you should be careful with MEC, check out our full research report (it’s free).

Strategy (MSTR)

One-Month Return: +29.6%

Once a traditional business intelligence software provider, Strategy (NASDAQ: MSTR) develops AI-powered enterprise analytics software while also functioning as a major corporate holder of Bitcoin cryptocurrency.

Why Are We Out on MSTR?

1. MicroStrategy’s core analytics software has been eclipsed by its all-in Bitcoin strategy, leaving product innovation and enterprise deals starved for attention
2. The company’s debt-financed Bitcoin buying ties shareholder fortunes to crypto swings and interest rates, amplifying downside risk and uncertainty
3. On the bright side, its vast Bitcoin treasury gives Executive Chairman Michael Saylor a unique springboard to capture crypto upside and court investors seeking leveraged exposure to digital assets

At $178.08 per share, Strategy trades at 122x forward price-to-sales. Check out our free in-depth research report to learn more about why MSTR doesn’t pass our bar.

TETRA Technologies (TTI)

One-Month Return: +28.4%

Operating across six continents with approximately 40,000 acres of mineral-rich brine leases in Arkansas, TETRA Technologies (NYSE: TTI) provides well completion fluids and water management services to oil and gas operators.

Why Is TTI Risky?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 4.7% annually over the last ten years
2. Subscale operations are evident in its revenue base of $630 million, meaning it has fewer distribution channels than its larger rivals
3. Gross margin of 29.1% reflects its high production costs and unfavorable asset base

TETRA Technologies is trading at $10.80 per share, or 41x forward P/E. If you’re considering TTI for your portfolio, see our FREE research report to learn more.

High-Quality Stocks for All Market Conditions

ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren't just high-quality businesses. Something is happening with them right now. Elite fundamentals meeting near-term momentum - both boxes checked at the same time.

Find out which stocks our AI platform is flagging this week. See this week's Strong Momentum stocks - FREE. Get Our Strong Momentum Stocks for Free HERE.

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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.