3 Inflated Stocks We Find Risky

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.

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.

Graco (GGG)

One-Month Return: +5.8%

Founded in 1926, Graco (NYSE:GGG) is an industrial company specializing in the development and manufacturing of fluid-handling systems and products.

Why Are We Cautious About GGG?

1. Sales stagnated over the last two years and signal the need for new growth strategies
2. Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
3. Eroding returns on capital suggest its historical profit centers are aging

At $87.55 per share, Graco trades at 27.9x forward P/E. Read our free research report to see why you should think twice about including GGG in your portfolio.

Avery Dennison (AVY)

One-Month Return: +3.3%

Founded as Kum Kleen Products, Avery Dennison (NYSE:AVY) is a manufacturer of adhesive materials, display graphics, and packaging products, serving various industries.

Why Is AVY Not Exciting?

1. Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
2. Free cash flow margin dropped by 2.5 percentage points over the last five years, implying the company became more capital intensive as competition picked up
3. Waning returns on capital imply its previous profit engines are losing steam

Avery Dennison is trading at $189.13 per share, or 18.9x forward P/E. If you’re considering AVY for your portfolio, see our FREE research report to learn more.

Origin Bancorp (OBK)

One-Month Return: +4.3%

Founded in 1912 during the early boom days of Louisiana banking, Origin Bancorp (NYSE:OBK) is a financial holding company that provides personalized banking services to businesses, municipalities, and individuals across Texas, Louisiana, and Mississippi.

Why Does OBK Give Us Pause?

1. Muted 4.6% annual revenue growth over the last two years shows its demand lagged behind its banking peers
2. Incremental sales over the last two years were less profitable as its 2.9% annual earnings per share growth lagged its revenue gains
3. Estimated tangible book value per share growth of 8.9% for the next 12 months implies profitability will slow from its two-year trend

Origin Bancorp’s stock price of $40.84 implies a valuation ratio of 1x forward P/B. To fully understand why you should be careful with OBK, check out our full research report (it’s free).

High-Quality Stocks for All Market Conditions

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