The stocks featured in this article are seeing some big returns. Over the past month, they’ve outpaced the market due to new product launches, positive news, or even a dedicated social media following.
However, not all companies with momentum are long-term winners, and many investors have lost money by following short-term trends. All that said, here are three stocks that are likely overheated and some you should look into instead.
Genco (GNK)
One-Month Return: +18.5%
Headquartered in NYC, Genco (NYSE:GNK) is a shipping company that transports dry bulk cargo along worldwide maritime routes.
Why Do We Steer Clear of GNK?
- Number of owned vessels has disappointed over the past two years, indicating weak demand for its offerings
- Earnings per share have dipped by 43.6% annually over the past two years, which is concerning because stock prices follow EPS over the long term
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 6.5 percentage points
Genco is trading at $15.70 per share, or 24.3x forward P/E. To fully understand why you should be careful with GNK, check out our full research report (it’s free).
Thermo Fisher (TMO)
One-Month Return: +11.8%
With over 14,000 sales personnel and a portfolio spanning more than 2,500 technology manufacturers, Thermo Fisher Scientific (NYSE:TMO) provides scientific equipment, reagents, consumables, software, and laboratory services to pharmaceutical, biotech, academic, and healthcare customers worldwide.
Why Are We Hesitant About TMO?
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- Expenses have increased as a percentage of revenue over the last five years as its adjusted operating margin fell by 10.2 percentage points
- Waning returns on capital imply its previous profit engines are losing steam
Thermo Fisher’s stock price of $471 implies a valuation ratio of 20x forward P/E. Check out our free in-depth research report to learn more about why TMO doesn’t pass our bar.
Comerica (CMA)
One-Month Return: +10.9%
Founded in 1849 during the California Gold Rush era, Comerica (NYSE:CMA) is a financial services company that provides commercial banking, retail banking, and wealth management services to businesses and individuals.
Why Does CMA Worry Us?
- Net interest income trends were unexciting over the last five years as its 3.2% annual growth was below the typical bank company
- Sales were less profitable over the last two years as its earnings per share fell by 26.9% annually, worse than its revenue declines
- Tangible book value per share was flat over the last five years, indicating it’s failed to build equity value this cycle
At $67.57 per share, Comerica trades at 1.3x forward P/B. Dive into our free research report to see why there are better opportunities than CMA.
High-Quality Stocks for All Market Conditions
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out 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 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.