3 High-Flying Stocks in Hot Water
Expensive stocks typically earn their valuations through superior growth rates that other companies simply can't match. The flip side though is that these lofty expectations make them particularly susceptible to drawdowns when market sentiment shifts.
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 are three high-flying stocks where the price is not right and some other investments you should look into instead.
Forward P/E Ratio: 51.2x
The result of a spinoff from Sanken in Japan, Allegro MicroSystems (NASDAQ:ALGM) is a designer of power management chips and distance sensors used in electric vehicles and data centers.
Why Do We Steer Clear of ALGM?
Annual sales declines of 13.7% for the past two years show its products and services struggled to connect with the market during this cycle
Falling earnings per share over the last four years has some investors worried as stock prices ultimately follow EPS over the long term
Free cash flow margin dropped by 10.5 percentage points over the last five years, implying the company became more capital intensive as competition picked up
Allegro MicroSystems is trading at $25.05 per share, or 51.2x forward P/E. To fully understand why you should be careful with ALGM, check out our full research report (it's free).
Forward P/E Ratio: 40.1x
Focused on the future of autonomous military combat, AeroVironment (NASDAQ:AVAV) specializes in advanced unmanned aircraft systems and electric vehicle charging solutions.
Why Are We Cautious About AVAV?
Expenses have increased as a percentage of revenue over the last five years as its operating margin fell by 7.5 percentage points
Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 24.6 percentage points
Waning returns on capital from an already weak starting point displays the inefficacy of management's past and current investment decisions
AeroVironment's stock price of $181.01 implies a valuation ratio of 40.1x forward P/E. Check out our free in-depth research report to learn more about why AVAV doesn't pass our bar.
Forward P/E Ratio: 41.1x
Founded in 1894 as a response to the growing dangers of electricity in American homes and businesses, UL Solutions (NYSE:ULS) provides testing, inspection, and certification services that help companies ensure their products meet safety, security, and sustainability standards.
Why Do We Think Twice About ULS?
4.3% annual revenue growth over the last three years was slower than its business services peers
At $71.82 per share, UL Solutions trades at 41.1x forward P/E. Read our free research report to see why you should think twice about including ULS in your portfolio, it's free.
Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking 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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
25 minutes ago
- Yahoo
Democrat-controlled budget office wrongly analyzed Trump's big bill, missed record savings, White House says
The White House is challenging the nonpartisan Congressional Budget Office's assessment that President Donald Trump's sweeping tax and spending package will raise the federal deficit by trillions of dollars throughout the next decade. The national debt, currently $36.2 trillion, tracks what the U.S. owes its creditors, while the national deficit measures how much the federal government's spending exceeds its revenues. So far, the federal government has spent more than $1 trillion more than it has collected this fiscal year, according to the Department of the Treasury. The Congressional Budget Office (CBO) issued an analysis Wednesday predicting that the so-called "big, beautiful, bill" the House passed in May would increase the federal deficit by $2.4 trillion over the next 10 years. But according to the White House, the CBO's analysis is based on a faulty premise because it assumes that Republicans in Congress will fail to extend Trump's 2017 tax cuts. Rather, the White House's Office of Management and Budget (OMB) forecasts that the tax and spending measures would independently reduce deficits by $1.4 trillion. Senate Weighs Trump's 'Big, Beautiful, Bill' As Policy Group Backs Cbo, Projects $3 Trillion Debt Increase Read On The Fox News App Additionally, the White House argues that the measure, coupled with other initiatives like tariffs and other spending cuts, will lead to reducing the deficit by at least $6.6 trillion over 10 years. The "big, beautiful, bill" has faced criticism from figures including SpaceX and Tesla CEO Elon Musk, who labeled the measure an "abomination" and argued that the bill would increase the federal deficit. The measure now heads to the Senate, where lawmakers, including Sen. Rand Paul, R-K.Y., have voiced opposition to the legislation. Trump's 'Big, Beautiful Bill' Faces Resistance From Republican Senators Over Debt Fears Meanwhile, OMB Director Russell Vought told lawmakers on the House Appropriations Committee Wednesday that he believed the CBO's analysis was "fundamentally wrong." "It will lead to reduced deficits and debt of $1.4 trillion," Vought said. "It will reduce mandatory savings of $1.7 trillion. I don't think the way they construct their baseline, not only does it not give a fair shake to economic growth, but it fundamentally misreads the economic consequences of not extending the current tax relief." Failure to pass Trump's tax package would trigger a recession, according to Vought. "We'll have a recession," Vought told lawmakers. "The economic storm clouds will be very dark. I think we'll have a 60% tax increase on the American people." Meanwhile, the White House has accused the CBO of employing those who've contributed to Democratic campaigns, even though CBO Director Phillip Swagel served in former President George W. Bush's administration. Price Tag Estimate For House Gop Tax Package Rises To $3.94T "I don't think many people know this: There hasn't been a single staffer in the entire Congressional Budget Office that has contributed to a Republican since the year 2000," Leavitt told reporters Tuesday. "But guess what, there have been many staffers within the Congressional Budget Office who have contributed to Democratic candidates and politicians every single cycle since. So unfortunately, this is an institution in our country that has become partisan and political." The CBO director is appointed according to the recommendations of the House and Senate Budget Committees. Then-Sen. Mike Enzi, R-Wyoming, first recommended Swagel in 2019, and then Rep. Jodey Arrington, R-Texas, recommended Swagel again in 2023. The CBO did not immediately respond to a request for comment from Fox News Digital on OMB's analysis or claims from the White House about the office being full of staffers who've backed Democrats. Fox News' Deirdre Heavey contributed to this report. Original article source: Democrat-controlled budget office wrongly analyzed Trump's big bill, missed record savings, White House says
Yahoo
25 minutes ago
- Yahoo
Idaho senators should protect school choice in ‘Big Beautiful Bill'
President Donald Trump's 'One Big Beautiful Bill' is now moving through the U.S. Senate, and conservative Christians are thrilled with many of the provisions that have been included so far. Although we don't yet know how the Senate version of the bill will shake out, it's worth noting that the version passed by the House late last month fulfills many of the pro-family policies made by the Trump administration. These include an expansion to the child tax credit for working families, tax benefits for adoptive parents and making permanent the Trump personal income and business tax cuts that fueled the above-average economic growth America experienced before the pandemic derailed international markets. However, one provision in particular that would improve educational access and outcomes for all students has flown under the radar so far. The provision would help more than one million students across the country access the educational support they need by creating special tax benefits for private donations to scholarship-granting organizations. It is modeled after the Educational Choice for Children Act, a federal proposal that has been introduced multiple times over the past several years and has earned the support of Sen. Jim Risch, R-Idaho, as well as other conservative stalwarts like Sen. Josh Hawley, R-Missouri, and Sen. Tim Scott, R-South Carolina. Scholarship-granting organizations already exist in many states, providing scholarships directly to students for tuition, tutoring, special needs services, education technology and curriculum materials. The provision offers both a supplement and alternative for students in states like Idaho, which has already begun moving down the road to more universal school choice programs by offering a new $5,000 refundable tax credit paid directly to the private school and homeschool families. Some parents — particularly within the homeschooling community — have voiced concerns that new school choice initiatives, such as Idaho's refundable tax credit, might jeopardize their educational freedom. After all, government money usually comes with strings attached. When you take the government cheese, you have to step into the regulatory mousetrap. And even if those restrictions aren't imposed right away, the door remains open for future state and federal mandates. Importantly, the ECCA provision in the One Big Beautiful Bill addresses these concerns by making sure no government funds go to the organizations, schools, or families involved — thereby avoiding another opportunity for government regulation. Instead, the ECCA establishes tax incentives for private donations to scholarship-granting organizations, which then award scholarships directly to students. Because this is private money — not government dollars — families can freely choose the best educational options for their children without government interference. All of this explains why the ECCA is supported by homeschool freedom advocates, including the Home School Legal Defense Association. In fact, the ECCA model helps ensure that parents remain in control of their children's education, consistent with biblical principles like Ephesians 6:4, which commands fathers to bring up their children in the discipline and instruction of the Lord. Not only would the ECCA provision in the 'One Big Beautiful Bill' help parents fulfill this biblical responsibility, but it would also expand educational opportunities for children currently stuck in failing public schools, no matter the state in which they live. Nationwide school choice which empowers parents while also protecting educational freedom is a high priority for Trump — and it should be just as high a priority for our legislative branch as they set education policy. With that in mind, we call on the U.S. Senate to keep the ECCA provision in whichever version of the 'One Big Beautiful Bill' they adopt. Our children — and their families — deserve it. Blaine Conzatti is the president of Idaho Family Policy Center.
Yahoo
35 minutes ago
- Yahoo
Trump loyalty is now part of job application
More than six million Americans are still looking for work, according to the latest data from the U.S. Bureau of Labor Statistics. Amid ongoing economic uncertainty, the federal government remains one of the country's most active employers, with open roles for nurses, actuaries, physicists, engineers and IT professionals listed at But prospective applicants may notice something different about the application process in 2025. Alongside typical questions about experience and qualifications, some federal job forms now ask about an applicant's alignment with presidential policy priorities, raising concerns about political screening in what are supposed to be nonpartisan civil service roles. Under guidance issued by the Chief Human Capital Officers Council (CHCOC), part of a broader federal hiring overhaul, applicants may be asked to explain how they would help implement specific executive orders or initiatives. One question currently being used reads: 'How would you help advance the President's Executive Orders and policy priorities in this role? Identify one or two relevant Executive Orders or policy initiatives that are significant to you, and explain how you would help implement them if hired.' This directive is connected to an executive order President Donald Trump that emphasizes 'merit-based' hiring over previous diversity, equity, and inclusion (DEI) considerations. The administration stated that these changes are intended to root out political bias and ensure a more ideologically aligned workforce. Critics argue that these practices resemble loyalty tests, particularly as questions of commitment to the Constitution and the President's policies appeared in job applications. Earlier this year, multiple government agencies experienced layoffs of employees who were seen as insufficiently aligned with current leadership, even in traditionally apolitical roles. Historical parallels have been raised. During the McCarthy era in the 1950s, public servants and private citizens alike were pressured to prove their loyalty to the U.S. government to root out suspected communists. Accusations and investigations often targeted personal beliefs rather than actions, leading to widespread firings, blacklisting and surveillance. Civil service roles in the U.S. were originally designed to serve the Constitution and the public, not individual officeholders. Federal employees take an oath to uphold the Constitution, a foundational distinction meant to separate American governance from monarchic or authoritarian systems. Whether the latest hiring guidelines are a temporary shift or a lasting transformation of the federal workforce remains to be seen. For now, job seekers interested in federal positions may want to prepare answers not just about their skills but about their stance on presidential policy.
