The stocks featured in this article are seeing some big returns. Over the past month, they’ve outpaced the market due to some combination of positive news, upbeat results, or supportive macro developments. As such, investors are taking notice and bidding up shares.
While momentum can be a leading indicator, it has burned many investors as it doesn’t always correlate with long-term success. Keeping that in mind, here are three stocks that are likely overheated and some you should look into instead.
Movado (MOV)
One-Month Return: +19.5%
With its watches displayed in 20 museums around the world, Movado (NYSE: MOV) is a watchmaking company with a portfolio of watch brands and accessories.
Why Do We Avoid MOV?
- Sales tumbled by 4.3% annually over the last two years, showing consumer trends are working against its favor
- Projected sales growth of 1.5% for the next 12 months suggests sluggish demand
- Waning returns on capital imply its previous profit engines are losing steam
At $18.48 per share, Movado trades at 0.6x trailing 12-month price-to-sales. Check out our free in-depth research report to learn more about why MOV doesn’t pass our bar.
Hillman (HLMN)
One-Month Return: +20.4%
Established when Max Hillman purchased a franchise operation, Hillman (NASDAQ: HLMN) designs, manufactures, and sells industrial equipment and systems for various sectors.
Why Are We Cautious About HLMN?
- Sales trends were unexciting over the last two years as its 1.6% annual growth was below the typical industrials company
- Operating margin of 3.9% falls short of the industry average, and the smaller profit dollars make it harder to react to unexpected market developments
- ROIC of 3% reflects management’s challenges in identifying attractive investment opportunities
Hillman is trading at $9.79 per share, or 17.8x forward P/E. If you’re considering HLMN for your portfolio, see our FREE research report to learn more.
Park-Ohio (PKOH)
One-Month Return: +22.4%
Based in Cleveland, Park-Ohio (NASDAQ: PKOH) provides supply chain management services, capital equipment, and manufactured components.
Why Does PKOH Give Us Pause?
- Sales were flat over the last two years, indicating it’s failed to expand this cycle
- High input costs result in an inferior gross margin of 15.4% that must be offset through higher volumes
- Cash burn makes us question whether it can achieve sustainable long-term growth
Park-Ohio’s stock price of $19.98 implies a valuation ratio of 5.9x forward P/E. To fully understand why you should be careful with PKOH, check out our full research report (it’s free).
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 Growth Stocks for this month. 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 Comfort Systems (+782% 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
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.
