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. On that note, here are three overhyped stocks that may correct and some you should consider instead.
Custom Truck One Source (CTOS)
One-Month Return: +24.8%
Inspired by a family gas station, Custom Truck One Source (NYSE: CTOS) is a distributor of trucks and heavy equipment.
Why Are We Hesitant About CTOS?
- Sales trends were unexciting over the last two years as its 4.3% annual growth was below the typical industrials company
- Earnings per share have dipped by 45.4% annually over the past two years, which is concerning because stock prices follow EPS over the long term
- Cash burn makes us question whether it can achieve sustainable long-term growth
Custom Truck One Source is trading at $9.84 per share, or 60.5x forward P/E. If you’re considering CTOS for your portfolio, see our FREE research report to learn more.
Valley National Bank (VLY)
One-Month Return: -4.9%
Tracing its roots back to 1927 during the economic boom before the Great Depression, Valley National Bancorp (NASDAQGS:VLY) operates Valley National Bank, providing commercial, consumer, and wealth management banking services across several states.
Why Do We Avoid VLY?
- Annual net interest income growth of 9.6% over the last five years was below our standards for the banking sector
- Inferior net interest margin of 3% means it must compensate for lower profitability through increased loan originations
- Performance over the past five years shows its incremental sales were less profitable, as its 1.5% annual earnings per share growth trailed its revenue gains
At $12.93 per share, Valley National Bank trades at 0.9x forward P/B. Read our free research report to see why you should think twice about including VLY in your portfolio.
TechnipFMC (FTI)
One-Month Return: +1%
Operating a fleet of 16 specialized vessels that install equipment on the seafloor, TechnipFMC (NYSE: FTI) designs and manufactures subsea systems that control the flow of oil and natural gas from the ocean floor to processing facilities.
Why Does FTI Give Us Pause?
- Sales tumbled by 2.5% annually over the last five years, showing market trends are working against its favor during this cycle
- High extraction costs and unfavorable asset economics are reflected in its low gross margin of 18.1%
TechnipFMC’s stock price of $70.90 implies a valuation ratio of 23.5x forward P/E. Dive into our free research report to see why there are better opportunities than FTI.
High-Quality Stocks for All Market Conditions
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
