"You get what you pay for" often applies to expensive stocks with best-in-class business models and execution. While their quality can sometimes justify the premium, they typically experience elevated volatility during market downturns when expectations change.

Finding the right balance between price and quality can challenge even the most skilled investors. Luckily for you, we started StockStory to help you identify the real opportunities. That said, here is one high-flying stock expanding its competitive advantage and two climbing an uphill battle.

Two High-Flying Stocks to Sell:

RXO (RXO)

Forward P/E Ratio: 54.5x

With access to millions of trucks, RXO (NYSE: RXO) offers full-truckload, less-than-truckload, and last-mile deliveries.

Why Do We Think Twice About RXO?

1. Expenses have increased as a percentage of revenue over the last five years as its operating margin fell by 5.4 percentage points
2. Incremental sales over the last two years were much less profitable as its earnings per share fell by 61.7% annually while its revenue grew
3. Underwhelming -0.5% return on capital reflects management’s difficulties in finding profitable growth opportunities

At $14.70 per share, RXO trades at 54.5x forward P/E. Check out our free in-depth research report to learn more about why RXO doesn’t pass our bar.

STAAR Surgical (STAA)

Forward P/E Ratio: 117.8x

With over 2.5 million implants performed worldwide, STAAR Surgical (NASDAQ: STAA) designs and manufactures implantable lenses that correct vision problems without removing the eye's natural lens.

Why Do We Think STAA Will Underperform?

1. Constant currency growth was below our standards over the past two years, suggesting it might need to invest in product improvements to get back on track
2. Free cash flow margin dropped by 35.2 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

STAAR Surgical is trading at $27.90 per share, or 117.8x forward P/E. Dive into our free research report to see why there are better opportunities than STAA.

One High-Flying Stock to Buy:

Kinsale Capital Group (KNSL)

Forward P/B Ratio: 5.7x

Founded in 2009 during the aftermath of the financial crisis when many insurers were retreating from riskier markets, Kinsale Capital Group (NYSE: KNSL) is an insurance company that specializes in writing policies for hard-to-place, unusual, or high-risk businesses that standard insurers typically avoid.

Why Should You Buy KNSL?

1. Net premiums earned expanded by 25.9% annually over the last two years, demonstrating exceptional market penetration this cycle
2. Annual book value per share growth of 40.2% over the last two years was superb and indicates its capital strength increased during this cycle
3. Capital strength will likely rise over the next 12 months as its expected book value per share growth of 25.5% is robust

Kinsale Capital Group’s stock price of $459.06 implies a valuation ratio of 5.7x forward P/B. Is now the right time to buy? Find out in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 5 Growth Stocks for this month. 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-micro-cap company Kadant (+351% 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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