3 High-Flying Stocks in Hot Water
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.
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Need to Supplement Your Retirement Income? Buy This Extremely Safe, High-Yielding Dividend Stock.
Key Points Realty Income owns a high-quality portfolio of income-generating real estate. The REIT has a strong financial profile. It has delivered reliable and resilient growth that should continue. 10 stocks we like better than Realty Income › Many retirees face a shortfall between their Social Security benefits, savings, and actual income needs. One study found this gap to be as high as 33% for the average U.S. household. As a result, current and future retirees must find additional income sources to live comfortably. Realty Income (NYSE: O) is an excellent choice for those seeking additional income. The real estate investment trust (REIT) owns a reliable and high-quality real estate portfolio that generates stable rental income. This enables the REIT to pay a steadily rising monthly dividend currently yielding 5.5%. Here's why Realty Income is a safe way to supplement your retirement income. A high-quality portfolio Realty Income's foundation is its high-quality real estate portfolio. The REIT owns over 15,600 properties in the U.S. and parts of Europe. Its portfolio includes retail (approximately 80% of its rent), industrial (15%), gaming (3%), and other properties, such as data centers (2%), net leased to over 1,600 tenants across 90+ industries. About 90% of rent comes from tenants in recession-resistant industries and those less affected by e-commerce, such as grocery stores, home improvement centers, and convenience stores. The company invests in properties secured by long-term net leases that provide predictable rental income because tenants cover all property operating costs, including routine maintenance, real estate taxes, and building insurance. Most leases raise rents at a low single-digit rate each year. As a result, Realty Income's existing portfolio delivers steadily rising rental income. 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Analysis-Trump's interest rate demands put 'fiscal dominance' in market spotlight
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"The administration wants to outgrow the debt ... but the other way to deal with the debt is to inflate it away," said Kelly Kowalski, head of investment strategy at MassMutual, who sees the dollar continuing to weaken. Higher inflation would mean the real value of government debt shrinks. Trump said last month that the Fed's benchmark interest rate should be three percentage points lower than the current 4.25%-4.50% range, arguing that such a reduction would save $1 trillion per year. He separately said the central bank could raise rates again if inflation rose. In the 12 months through June, inflation as measured by the Personal Consumption Expenditures Price Index advanced 2.6% - still above the Fed's 2% target. Fed Chair Jerome Powell, however, has explicitly said that the U.S. central bank does not consider managing government debt when setting its monetary policy. 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"It's difficult to be bullish (on) long bonds in this environment," said Oliver Shale, an investment specialist at Ruffer, citing government spending that could keep inflation elevated and erode bond values. "If you have an economy that's running above its natural output, that's going to result in inflation or have important implications for inflation, interest rates, and probably the currency," he said. Thooft at Manulife said he was bearish on long-dated Treasuries as higher inflation would require higher term premiums. Despite years of economic growth, U.S. deficits have continued to balloon. Debt now stands at more than 120% of GDP, higher than after World War Two. The Fed normally manages inflation while Congress maintains fiscal discipline. That balance inverts under the fiscal dominance scenario, with inflation driven by fiscal policies and a Fed trying to manage the debt burden, said Eric Leeper, an economics professor at the University of Virginia. 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