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.
However, not all companies with momentum are long-term winners, and many investors have lost money by following short-term trends. All that said, here are three overhyped stocks that may correct and some you should consider instead.
Monro (MNRO)
One-Month Return: +15.7%
Started as a single location in Rochester, New York, Monro (NASDAQ:MNRO) provides common auto services such as brake repairs, tire replacements, and oil changes.
Why Should You Sell MNRO?
- Ongoing store closures and lackluster same-store sales indicate sluggish demand and a focus on consolidation
- Poor same-store sales performance over the past two years indicates it’s having trouble bringing new shoppers into its brick-and-mortar locations
- Performance over the past three years shows each sale was less profitable as its earnings per share dropped by 29.9% annually, worse than its revenue
Monro’s stock price of $21.03 implies a valuation ratio of 39x forward P/E. To fully understand why you should be careful with MNRO, check out our full research report (it’s free for active Edge members).
Freshpet (FRPT)
One-Month Return: +23.3%
Standing out from typical processed pet foods, Freshpet (NASDAQ:FRPT) is a pet food company whose product portfolio includes natural meals and treats for dogs and cats.
Why Is FRPT Not Exciting?
- Smaller revenue base of $1.08 billion means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
- Cash-burning history makes us doubt the long-term viability of its business model
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
Freshpet is trading at $65.63 per share, or 44.7x forward P/E. If you’re considering FRPT for your portfolio, see our FREE research report to learn more.
Herc (HRI)
One-Month Return: +29%
Formerly a subsidiary of Hertz Corporation and with a logo that still bears some similarities to its former parent, Herc Holdings (NYSE:HRI) provides equipment rental and related services to a wide range of industries.
Why Are We Wary of HRI?
- Performance over the past two years shows its incremental sales were much less profitable, as its earnings per share fell by 15.2% annually
- Free cash flow margin dropped by 9.4 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- High net-debt-to-EBITDA ratio of 6× could force the company to raise capital at unfavorable terms if market conditions deteriorate
At $154.41 per share, Herc trades at 20.5x forward P/E. Dive into our free research report to see why there are better opportunities than HRI.
Stocks We Like More
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
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-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.