3 Hyped Up Stocks We Approach with Caution

Each stock in this article is trading near its 52-week high. These elevated prices usually indicate some degree of investor confidence, business improvements, or favorable market conditions.

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.

NXP Semiconductors (NXPI)

One-Month Return: +0.7%

Spun off from Dutch electronics giant Philips in 2006, NXP Semiconductors (NASDAQ: NXPI) is a designer and manufacturer of chips used in autos, industrial manufacturing, mobile devices, and communications infrastructure.

Why Are We Wary of NXPI?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 3.9% annually over the last two years
2. Anticipated sales growth of 10.6% for the next year implies demand will be shaky

NXP Semiconductors is trading at $231.00 per share, or 16.8x forward P/E. Check out our free in-depth research report to learn more about why NXPI doesn’t pass our bar.

Lincoln Educational (LINC)

One-Month Return: +30.1%

Established in 1946, Lincoln Educational (NASDAQ:LINC) is a provider of specialized technical training in the United States, offering career-oriented programs to provide practical skills required in the workforce.

Why Do We Avoid LINC?

1. Demand for its offerings was relatively low as its number of enrolled students has underwhelmed
2. Negative free cash flow raises questions about the return timeline for its investments
3. Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results

At $33.86 per share, Lincoln Educational trades at 49.5x forward P/E. To fully understand why you should be careful with LINC, check out our full research report (it’s free).

Stanley Black & Decker (SWK)

One-Month Return: +8.3%

With an iconic “STANLEY” logo which has remained virtually unchanged for over a century, Stanley Black & Decker (NYSE:SWK) is a manufacturer primarily catering to the tool and outdoor equipment industry.

Why Should You Dump SWK?

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 12.3% annually over the last five years, a headwind for returns as stock prices often echo long-term EPS performance
3. Low free cash flow margin of 0.6% for the last five years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders

Stanley Black & Decker’s stock price of $87.77 implies a valuation ratio of 15.9x forward P/E. Read our free research report to see why you should think twice about including SWK in your portfolio.

Stocks We Like More

If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.

Don’t wait for the next volatility shock. Check out our Top 6 Stocks for this week. 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 Kadant (+351% five-year return). Find your next big winner with StockStory today.