1 High-Flying Stock on Our Watchlist and 2 We Brush Off

"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. Keeping that in mind, here is one high-flying stock to hold for the long term and two climbing an uphill battle.

Two High-Flying Stocks to Sell:

Vishay Intertechnology (VSH)

Forward P/E Ratio: 54.8x

Named after the founder's ancestral village in present-day Lithuania, Vishay Intertechnology (NYSE:VSH) manufactures simple chips and electronic components that are building blocks of virtually all types of electronic devices.

Why Is VSH Risky?

1. Annual sales declines of 5% for the past two years show its products and services struggled to connect with the market during this cycle
2. Competitive supply chain dynamics and steep production costs are reflected in its low gross margin of 20.3%
3. Cash-burning history and the downward spiral in its margin profile make us wonder if it has a viable business model

Vishay Intertechnology’s stock price of $33.68 implies a valuation ratio of 54.8x forward P/E. Check out our free in-depth research report to learn more about why VSH doesn’t pass our bar.

Portillo's (PTLO)

Forward P/E Ratio: 24.2x

Begun as a Chicago hot dog stand in 1963, Portillo’s (NASDAQ:PTLO) is a casual restaurant chain that serves Chicago-style hot dogs and beef sandwiches as well as fries and shakes.

Why Do We Think PTLO Will Underperform?

1. Disappointing same-store sales over the past two years show customers aren’t responding well to its menu offerings and dining experience
2. Low free cash flow margin of -0.1% declined over the last year as its investments ramped, giving it little breathing room
3. 7× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings

At $4.52 per share, Portillo's trades at 24.2x forward P/E. Dive into our free research report to see why there are better opportunities than PTLO.

One High-Flying Stock to Watch:

Applied Materials (AMAT)

Forward P/E Ratio: 33.9x

Founded in 1967 as the first company to develop tools for other businesses in the semiconductor industry, Applied Materials (NASDAQ:AMAT) is the largest provider of semiconductor wafer fabrication equipment.

Why Could AMAT Be a Winner?

1. Healthy operating margin of 28.7% shows it’s a well-run company with efficient processes
2. Free cash flow generation is better than most peers and allows it to explore new investment opportunities
3. Industry-leading 46.8% return on capital demonstrates management’s skill in finding high-return investments

Applied Materials is trading at $428.10 per share, or 33.9x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.

High-Quality Stocks for All Market Conditions

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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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.