The stocks in this article are all trading near their 52-week highs. This strength often reflects positive developments such as new product launches, favorable industry trends, or improved financial performance.
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.
VSE Corporation (VSEC)
One-Month Return: +14.4%
With roots dating back to 1959 and a strategic focus on extending the life of transportation assets, VSE Corporation (NASDAQ: VSEC) provides aftermarket parts distribution and maintenance, repair, and overhaul services for aircraft and vehicle fleets in commercial and government markets.
Why Does VSEC Fall Short?
- Gross margin of 17.3% reflects its high production costs
- Cash-burning history makes us doubt the long-term viability of its business model
- ROIC of 5.1% reflects management’s challenges in identifying attractive investment opportunities
VSE Corporation is trading at $191.50 per share, or 46.3x forward P/E. Check out our free in-depth research report to learn more about why VSEC doesn’t pass our bar.
Littelfuse (LFUS)
One-Month Return: +4.4%
The developer of the first blade-type automotive fuse, Littelfuse (NASDAQ: LFUS) provides electrical protection and control components for the automotive, industrial, electronics, and telecommunications industries.
Why Do We Think Twice About LFUS?
- Sales tumbled by 2.5% annually over the last two years, showing market trends are working against its favor during this cycle
- Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
At $270.51 per share, Littelfuse trades at 21.7x forward P/E. To fully understand why you should be careful with LFUS, check out our full research report (it’s free for active Edge members).
Ford (F)
One-Month Return: +2.4%
Established to make automobiles accessible to a broader segment of the population, Ford (NYSE: F) designs, manufactures, and sells a variety of automobiles, trucks, and electric vehicles.
Why Do We Steer Clear of F?
- Flat vehicles sold over the past two years imply it may need to invest in improvements to get back on track
- Performance over the past two years shows its incremental sales were much less profitable, as its earnings per share fell by 22.5% annually
- 9× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings
Ford’s stock price of $13.46 implies a valuation ratio of 11.5x forward P/E. Read our free research report to see why you should think twice about including F in your portfolio.
Stocks We Like More
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 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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today.
