Expensive stocks often command premium valuations because the market thinks their business models are exceptional. However, the downside is that high expectations are already baked into their prices, leaving little room for error if they stumble even slightly.
Finding the right balance between price and quality can challenge even the most skilled investors. Luckily for you, we started StockStory to help you identify the real opportunities. That said, here is one high-flying stock expanding its competitive advantage and two with big downside risk.
Two High-Flying Stocks to Sell:
Texas Instruments (TXN)
Forward P/E Ratio: 34.8x
Headquartered in Dallas, Texas since the 1950s, Texas Instruments (NASDAQ:TXN) is the world’s largest producer of analog semiconductors.
Why Are We Hesitant About TXN?
- Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 4.1% over the last five years was below our standards for the semiconductor sector
- Earnings per share fell by 1.8% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
- 19.6 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
Texas Instruments is trading at $225.95 per share, or 34.8x forward P/E. To fully understand why you should be careful with TXN, check out our full research report (it’s free).
American Outdoor Brands (AOUT)
Forward P/E Ratio: 39.4x
Spun off from Smith and Wesson in 2020, American Outdoor Brands (NASDAQ:AOUT) is an outdoor and recreational products company that offers outdoor and shooting sports products but does not sell firearms themselves.
Why Should You Sell AOUT?
- Products and services fail to spark excitement with consumers, as seen in its flat sales over the last five years
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 1.5% for the last two years
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
American Outdoor Brands’s stock price of $8.97 implies a valuation ratio of 39.4x forward P/E. Read our free research report to see why you should think twice about including AOUT in your portfolio.
One High-Flying Stock to Buy:
Curtiss-Wright (CW)
Forward P/E Ratio: 44.8x
Formed from a merger of 12 companies, Curtiss-Wright (NYSE:CW) provides a range of products and services to the aerospace, industrial, electronic, and maritime industries.
Why Is CW a Top Pick?
- Market share has increased this cycle as its 10.9% annual revenue growth over the last two years was exceptional
- Disciplined cost controls and effective management resulted in a strong long-term operating margin of 16.9%, and its profits increased over the last five years as it scaled
- Share buybacks catapulted its annual earnings per share growth to 18.8%, which outperformed its revenue gains over the last two years
At $684.21 per share, Curtiss-Wright trades at 44.8x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
High-Quality Stocks for All Market Conditions
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
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.