3 Inflated Stocks with Open Questions

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.

But not every company with momentum is a long-term winner, and plenty of investors have lost money betting on short-term fads. Keeping that in mind, here are three stocks getting more buzz than they deserve and some you should buy instead.

FOX (FOXA)

One-Month Return: +1.6%

Founded in 1915, Fox (NASDAQ: FOXA) is a diversified media company, operating prominent cable news, television broadcasting, and digital media platforms.

Why Is FOXA Risky?

1. Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 3.9% over the last two years was below our standards for the consumer discretionary sector
2. Projected sales decline of 4.4% for the next 12 months points to a tough demand environment ahead

FOX is trading at $56.70 per share, or 14.3x forward P/E. Check out our free in-depth research report to learn more about why FOXA doesn’t pass our bar.

Crown Holdings (CCK)

One-Month Return: +6.1%

Formerly Crown Cork & Seal, Crown Holdings (NYSE: CCK) produces packaging products for consumer marketing companies, including food, beverage, household, and industrial products.

Why Do We Avoid CCK?

1. Underwhelming constant currency revenue performance over the past two years suggests its product offering at current prices doesn’t resonate with customers
2. Projected sales growth of 2.1% for the next 12 months suggests sluggish demand
3. High input costs result in an inferior gross margin of 20.3% that must be offset through higher volumes

Crown Holdings’s stock price of $104.45 implies a valuation ratio of 15x forward P/E. To fully understand why you should be careful with CCK, check out our full research report (it’s free).

Encompass Health (EHC)

One-Month Return: -0.8%

With a network of 161 specialized facilities across 37 states and Puerto Rico, Encompass Health (NYSE: EHC) operates inpatient rehabilitation hospitals that help patients recover from strokes, hip fractures, and other debilitating conditions.

Why Does EHC Give Us Pause?

1. Efficiency has decreased over the last two years as its adjusted operating margin fell by 4 percentage points
2. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 2.2 percentage points

At $120.01 per share, Encompass Health trades at 24.8x forward P/E. If you’re considering EHC for your portfolio, see our FREE research report to learn more.

High-Quality Stocks for All Market Conditions

Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.

While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 9 Market-Beating Stocks. 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 Exlservice (+354% 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