Exciting developments are taking place for the stocks in this article. They’ve all surged ahead of the broader market over the last month as catalysts such as new products and positive media coverage have propelled their returns.

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 stocks that are likely overheated and some you should look into instead.

Victoria's Secret (VSCO)

One-Month Return: +39.4%

Spun off from L Brands in 2020, Victoria’s Secret (NYSE: VSCO) is an intimate clothing and beauty retailer that sells its own brands of lingerie, undergarments, and personal fragrances.

Why Should You Sell VSCO?

1. Products fail to spark excitement with consumers, as seen in its flat sales over the last three years
2. Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and store experience
3. Falling earnings per share over the last three years has some investors worried as stock prices ultimately follow EPS over the long term

At $48.77 per share, Victoria's Secret trades at 15.9x forward P/E. If you’re considering VSCO for your portfolio, see our FREE research report to learn more.

Manitowoc (MTW)

One-Month Return: +9.7%

Contracted by the United States Navy during WWII, Manitowoc (NYSE: MTW) provides cranes and lifting equipment.

Why Should You Dump MTW?

1. Sales pipeline suggests its future revenue growth won’t meet our standards as its backlog averaged 13.6% declines over the past two years
2. Performance over the past two years shows each sale was less profitable as its earnings per share dropped by 72.8% annually, worse than its revenue
3. Low free cash flow margin of -0.4% declined over the last five years as its investments ramped, giving it little breathing room

Manitowoc’s stock price of $12.27 implies a valuation ratio of 16.2x forward P/E. Dive into our free research report to see why there are better opportunities than MTW.

Encore Capital Group (ECPG)

One-Month Return: +6.6%

Operating in the often misunderstood world of debt collection since 1999, Encore Capital Group (NASDAQ: ECPG) purchases portfolios of defaulted consumer debt at deep discounts and works with individuals to recover these obligations while helping them toward financial recovery.

Why Does ECPG Give Us Pause?

1. Sales trends were unexciting over the last five years as its 1.3% annual growth was below the typical financials company
2. Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 15.9% annually
3. High net-debt-to-EBITDA ratio of 11× increases the risk of forced asset sales or dilutive financing if operational performance weakens

Encore Capital Group is trading at $52.88 per share, or 7.2x forward P/E. Read our free research report to see why you should think twice about including ECPG in your portfolio.

Stocks We Like More

Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.

The names generating the next wave of massive growth are right here in 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-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

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