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 to hold for the long term and two where the price is not right.
Two High-Flying Stocks to Sell:
Littelfuse (LFUS)
Forward P/E Ratio: 31.8x
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 Does LFUS Fall Short?
- Sales trends were unexciting over the last two years as its 4.3% annual growth was below the typical industrials company
- Expenses have increased as a percentage of revenue over the last five years as its operating margin fell by 17.8 percentage points
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
Littelfuse is trading at $469.18 per share, or 31.8x forward P/E. Check out our free in-depth research report to learn more about why LFUS doesn’t pass our bar.
Heartland Express (HTLD)
Forward P/E Ratio: 167.4x
Founded by the son of a trucker, Heartland Express (NASDAQ: HTLD) offers full-truckload deliveries across the United States and Mexico.
Why Do We Avoid HTLD?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 18.5% annually over the last two years
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 19.4% annually while its revenue grew
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
At $15.37 per share, Heartland Express trades at 167.4x forward P/E. To fully understand why you should be careful with HTLD, check out our full research report (it’s free).
One High-Flying Stock to Buy:
KLA Corporation (KLAC)
Forward P/E Ratio: 53.9x
Formed by the 1997 merger of the two leading semiconductor yield management companies, KLA Corporation (NASDAQ: KLAC) is the leading supplier of equipment used to measure and inspect semiconductor chips.
Why Do We Love KLAC?
- Annual revenue growth of 15.2% over the past five years was outstanding, reflecting market share gains this cycle
- Highly efficient business model is illustrated by its impressive 40% operating margin, and its profits increased over the last five years as it scaled
- Robust free cash flow margin of 30.5% gives it many options for capital deployment
KLA Corporation’s stock price of $238.17 implies a valuation ratio of 53.9x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
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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 Kadant (+351% five-year return). Find your next big winner with StockStory today.
