"You get what you pay for" often applies to expensive stocks with best-in-class business models and execution. While their quality can sometimes justify the premium, they typically experience elevated volatility during market downturns when expectations change.
Separating true intrinsic value from speculation isn’t easy, especially during bull markets. That’s where StockStory comes in - to help you find high-quality companies that will stand the test of time. That said, here is one high-flying stock expanding its competitive advantage and two with big downside risk.
Two High-Flying Stocks to Sell:
Freshpet (FRPT)
Forward P/E Ratio: 48.1x
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?
- Revenue base of $1.08 billion puts it at a disadvantage compared to larger competitors exhibiting economies of scale
- Cash-burning history makes us doubt the long-term viability of its business model
- ROIC of -0.8% reflects management’s challenges in identifying attractive investment opportunities
Freshpet’s stock price of $69.40 implies a valuation ratio of 48.1x forward P/E. If you’re considering FRPT for your portfolio, see our FREE research report to learn more.
MasTec (MTZ)
Forward P/E Ratio: 34.4x
Involved in the 1996 Olympic Games MasTec (NYSE:MTZ) is an infrastructure construction company that specializes in the telecommunications, energy, and utility industries.
Why Are We Wary of MTZ?
- Gross margin of 12.9% reflects its high production costs
- Operating margin of 3.1% decreased from an already low base, demonstrating the tradeoff between growth and profitability
- 4.2 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
At $261.68 per share, MasTec trades at 34.4x forward P/E. Read our free research report to see why you should think twice about including MTZ in your portfolio.
One High-Flying Stock to Watch:
Clover Health (CLOV)
Forward P/E Ratio: 29.9x
Founded in 2014 to improve healthcare for America's seniors through technology, Clover Health (NASDAQ:CLOV) provides Medicare Advantage plans for seniors with a focus on affordable care and uses its proprietary Clover Assistant software to help physicians manage patient care.
Why Is CLOV on Our Radar?
- Business is winning new contracts that can potentially increase in value as its customer base averaged 34.7% growth over the past two years
- Earnings per share grew by 19.1% annually over the last four years, massively outpacing its peers
- Cash burn has become less severe over the last five years, showing the company is making some progress toward financial sustainability
Clover Health is trading at $2.14 per share, or 29.9x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even 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 5 Growth Stocks for this month. 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 Exlservice (+354% five-year return). Find your next big winner with StockStory today.
/Microsoft%20sign%20at%20the%20headquarters%20by%20VDB%20Photos%20via%20Shutterstock.jpg)
