Each stock in this article is trading near its 52-week high. These elevated prices usually indicate some degree of investor confidence, business improvements, or favorable market conditions.
However, not all companies with momentum are long-term winners, and many investors have lost money by following short-term trends. On that note, here are three stocks that are likely overheated and some you should look into instead.
Lindblad Expeditions (LIND)
One-Month Return: +18.6%
Founded by explorer Sven-Olof Lindblad in 1979, Lindblad Expeditions (NASDAQ: LIND) offers cruising experiences to remote destinations in partnership with National Geographic.
Why Should You Dump LIND?
- Operating margin of 3.8% falls short of the industry average, and the smaller profit dollars make it harder to react to unexpected market developments
- Projected 2.2 percentage point decline in its free cash flow margin next year reflects the company’s plans to increase its investments to defend its market position
- Negative returns on capital show that some of its growth strategies have backfired
Lindblad Expeditions is trading at $14.66 per share, or 7.2x forward EV-to-EBITDA. To fully understand why you should be careful with LIND, check out our full research report (it’s free).
Supernus Pharmaceuticals (SUPN)
One-Month Return: +12.2%
With a diverse portfolio of eight FDA-approved medications targeting neurological conditions, Supernus Pharmaceuticals (NASDAQ: SUPN) develops and markets treatments for central nervous system disorders including epilepsy, ADHD, Parkinson's disease, and migraine.
Why Are We Wary of SUPN?
- Sales trends were unexciting over the last two years as its 2.4% annual growth was below the typical healthcare company
- Subscale operations are evident in its revenue base of $665.1 million, meaning it has fewer distribution channels than its larger rivals
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Supernus Pharmaceuticals’s stock price of $46.28 implies a valuation ratio of 23.1x forward P/E. Read our free research report to see why you should think twice about including SUPN in your portfolio.
United Community Banks (UCB)
One-Month Return: +11.9%
Starting as a small community bank in 1950 and expanding through strategic acquisitions across the Southeast, United Community Banks (NYSE: UCB) is a regional bank holding company that provides financial services including loans, deposits, wealth management, and merchant services across the southeastern United States.
Why Are We Hesitant About UCB?
- Muted 1.2% annual revenue growth over the last two years shows its demand lagged behind its banking peers
- Weak unit economics are reflected in its net interest margin of 3.3%, one of the worst among bank companies
- Costs have risen faster than its revenue over the last four years, causing its efficiency ratio to worsen by 3.2 percentage points
At $33.23 per share, United Community Banks trades at 1.1x forward P/B. If you’re considering UCB for your portfolio, see our FREE research report to learn more.
Stocks We Like More
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-small-cap company Exlservice (+354% 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
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