2 High-Flying Stocks with Competitive Advantages and 1 to Keep Off Your Radar

Expensive stocks typically earn their valuations through superior growth rates that other companies simply can’t match. The flip side though is that these lofty expectations make them particularly susceptible to drawdowns when market sentiment shifts.

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 are two high-flying stocks to hold for the long term and one where the price is not right.

One High-Flying Stock to Sell:

Fastenal (FAST)

Forward P/E Ratio: 37.6x

Founded in 1967, Fastenal (NASDAQ:FAST) provides industrial and construction supplies, including fasteners, tools, safety products, and many other product categories to businesses globally.

Why Does FAST Give Us Pause?

1. Annual revenue growth of 3.3% over the last two years was below our standards for the industrials sector
2. Performance over the past two years shows its incremental sales were less profitable, as its 1.5% annual earnings per share growth trailed its revenue gains
3. 6 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 $40.66 per share, Fastenal trades at 37.6x forward P/E. If you’re considering FAST for your portfolio, see our FREE research report to learn more.

Two High-Flying Stocks to Watch:

Sprouts (SFM)

Forward P/E Ratio: 35.7x

Playing on the secular trend of healthier living, Sprouts Farmers Market (NASDAQ:SFM) is a grocery store chain emphasizing natural and organic products.

Why Is SFM Interesting?

1. Offensive push to build new stores and attack its untapped market opportunities is backed by its same-store sales growth
2. Locations open for at least a year are seeing increased demand as same-store sales have averaged 6.6% growth over the past two years
3. Exciting sales outlook for the upcoming 12 months calls for 11.6% growth, an acceleration from its six-year trend

Sprouts’s stock price of $174.31 implies a valuation ratio of 35.7x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.

Construction Partners (ROAD)

Forward P/E Ratio: 45.6x

Founded in 2001, Construction Partners (NASDAQ:ROAD) is a civil infrastructure company that builds and maintains roads, highways, and other infrastructure projects.

Why Will ROAD Beat the Market?

1. Projected revenue growth of 40.5% for the next 12 months is above its two-year trend, pointing to accelerating demand
2. Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 91% annually
3. Returns on capital are increasing as management’s prior bets are starting to bear fruit

Construction Partners is trading at $107.50 per share, or 45.6x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.

While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 5 Strong Momentum 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-small-cap company Comfort Systems (+782% 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