3 Inflated Industrials Stocks That Concern Us

The stocks in this article are all trading near their 52-week highs. This strength often reflects positive developments such as new product launches, favorable industry trends, or improved financial performance.

While momentum can be a leading indicator, it has burned many investors as it doesn’t always correlate with long-term success. On that note, here are three overhyped stocks that may correct and some you should consider instead.

AMETEK (AME)

One-Month Return: +7.3%

Started from its humble beginnings in motor repair, AMETEK (NYSE:AME) manufactures electronic devices used in industries like aerospace, power, and healthcare.

Why Are We Cautious About AME?

1. 5.1% annual revenue growth over the last two years was slower than its industrials peers
2. Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth

AMETEK is trading at $196.31 per share, or 25.4x forward P/E. To fully understand why you should be careful with AME, check out our full research report (it’s free for active Edge members).

WESCO (WCC)

One-Month Return: +16.4%

Based in Pittsburgh, WESCO (NYSE:WCC) provides electrical, industrial, and communications products and augments them with services such as supply chain management.

Why Are We Wary of WCC?

1. Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
2. Earnings per share have dipped by 11.2% annually over the past two years, which is concerning because stock prices follow EPS over the long term
3. Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 1.6% for the last five years

At $255.42 per share, WESCO trades at 16.3x forward P/E. Check out our free in-depth research report to learn more about why WCC doesn’t pass our bar.

Zurn Elkay (ZWS)

One-Month Return: +1%

Claiming to have saved more than 30 billion gallons of water, Zurn Elkay (NYSE:ZWS) provides water management solutions to various industries.

Why Does ZWS Worry Us?

1. Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
2. Earnings per share have contracted by 4.5% annually over the last five years, a headwind for returns as stock prices often echo long-term EPS performance
3. Free cash flow margin shrank by 16.5 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive

Zurn Elkay’s stock price of $47.74 implies a valuation ratio of 30x forward P/E. If you’re considering ZWS for your portfolio, see our FREE research report to learn more.

Stocks We Like More

Fresh US-China trade tensions just tanked stocks—but strong bank earnings are fueling a sharp rebound. Don’t miss the bounce.

Don’t let fear keep you from great opportunities and take a look at Top 6 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 Kadant (+351% 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

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