The stocks featured in this article have all approached their 52-week highs. When these price levels hit, it typically signals strong business execution, positive market sentiment, or significant industry tailwinds.
But not every company with momentum is a long-term winner, and plenty of investors have lost money betting on short-term fads. All that said, here are three overhyped stocks that may correct and some you should consider instead.
SiteOne (SITE)
One-Month Return: +6.4%
Known for distributing John Deere tractors and LESCO turf care products, SiteOne Landscape Supply (NYSE:SITE) provides landscaping products and services to professionals, including irrigation, lighting, and nursery supplies.
Why Are We Out on SITE?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Earnings per share fell by 3.9% annually over the last two years while its revenue grew, showing its incremental sales were much less profitable
- Waning returns on capital imply its previous profit engines are losing steam
SiteOne is trading at $156.97 per share, or 35.2x forward P/E. Read our free research report to see why you should think twice about including SITE in your portfolio.
Textron (TXT)
One-Month Return: +4.5%
Listed on the NYSE in 1947, Textron (NYSE:TXT) provides products and services in the aerospace, defense, industrial, and finance sectors.
Why Is TXT Not Exciting?
- Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 4% for the last two years
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 4.5% annually
- 3.4 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
Textron’s stock price of $98.47 implies a valuation ratio of 15.3x forward P/E. Dive into our free research report to see why there are better opportunities than TXT.
Gilead Sciences (GILD)
One-Month Return: +24.4%
From its groundbreaking work in developing the first single-tablet regimens for HIV treatment, Gilead Sciences (NASDAQ:GILD) develops and markets innovative medicines for life-threatening diseases including HIV, viral hepatitis, COVID-19, and cancer.
Why Does GILD Give Us Pause?
- The company has faced growth challenges as its 3.6% annual revenue increases over the last five years fell short of other healthcare companies
- 7.5 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
- Eroding returns on capital suggest its historical profit centers are aging
At $155.39 per share, Gilead Sciences trades at 17.4x forward P/E. To fully understand why you should be careful with GILD, check out our full research report (it’s free).
High-Quality Stocks for All Market Conditions
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 5 Strong Momentum 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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.