The stocks featured in this article are seeing some big returns. Over the past month, they’ve outpaced the market due to new product launches, positive news, or even a dedicated social media following.
While momentum can be a leading indicator, it has burned many investors as it doesn’t always correlate with long-term success. All that said, here are three stocks that are likely overheated and some you should look into instead.
Nature's Sunshine (NATR)
One-Month Return: +20.7%
Started on a kitchen table in Utah, Nature’s Sunshine (NASDAQ:NATR) manufactures and sells nutritional and personal care products.
Why Does NATR Give Us Pause?
- Sales stagnated over the last three years and signal the need for new growth strategies
- Revenue base of $456.6 million puts it at a disadvantage compared to larger competitors exhibiting economies of scale
- Earnings per share fell by 20.6% annually over the last three years while its revenue was flat, showing each sale was less profitable
At $14.27 per share, Nature's Sunshine trades at 18.4x forward P/E. If you’re considering NATR for your portfolio, see our FREE research report to learn more.
Hasbro (HAS)
One-Month Return: +7.9%
Credited with the creation of toys such as Mr. Potato Head and the Rubik’s Cube, Hasbro (NASDAQ:HAS) is a global entertainment company offering a diverse range of toys, games, and multimedia experiences for children and families.
Why Do We Pass on HAS?
- Annual sales declines of 3.5% for the past five years show its products and services struggled to connect with the market
- Poor expense management has led to operating losses
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
Hasbro’s stock price of $66.18 implies a valuation ratio of 15.7x forward P/E. Check out our free in-depth research report to learn more about why HAS doesn’t pass our bar.
Oshkosh (OSK)
One-Month Return: +10%
Oshkosh (NYSE:OSK) manufactures specialty vehicles for the defense, fire, emergency, and commercial industry, operating various brand subsidiaries within each industry.
Why Do We Think Twice About OSK?
- Backlog growth averaged a weak 4% over the past two years, suggesting it may need to tweak its product roadmap or go-to-market strategy
- Sales are projected to remain flat over the next 12 months as demand decelerates from its two-year trend
- Free cash flow margin shrank by 9.9 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
Oshkosh is trading at $97.74 per share, or 9x forward P/E. To fully understand why you should be careful with OSK, check out our full research report (it’s free).
Stocks We Like More
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like 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 176% over the last five years.
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 Kadant (+351% five-year return). Find your next big winner with StockStory today for free.