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.

Analog Devices (ADI)

One-Month Return: +10.3%

Founded by two MIT graduates, Ray Stata and Matthew Lorber in 1965, Analog Devices (NASDAQ: ADI) is one of the largest providers of high performance analog integrated circuits used mainly in industrial end markets, along with communications, autos, and consumer devices.

Why Does ADI Fall Short?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 10.1% annually over the last two years
2. Day-to-day expenses have swelled relative to revenue over the last five years as its operating margin fell by 7 percentage points
3. ROIC of 6.5% reflects management’s challenges in identifying attractive investment opportunities, and its decreasing returns suggest its historical profit centers are aging

Analog Devices is trading at $254.57 per share, or 30.1x forward P/E. To fully understand why you should be careful with ADI, check out our full research report (it’s free).

Frontdoor (FTDR)

One-Month Return: +2.6%

Established in 2018 as a spin-off from ServiceMaster Global Holdings, Frontdoor (NASDAQ: FTDR) is a provider of home warranty and service plans.

Why Are We Wary of FTDR?

1. Sales trends were unexciting over the last five years as its 6.8% annual growth was below the typical consumer discretionary company
2. Performance surrounding its home service plans has lagged its peers
3. Projected sales growth of 8.5% for the next 12 months suggests sluggish demand

Frontdoor’s stock price of $60.05 implies a valuation ratio of 16.6x forward P/E. If you’re considering FTDR for your portfolio, see our FREE research report to learn more.

Old Republic International (ORI)

One-Month Return: +10.1%

Founded during the Roaring Twenties in 1923 and weathering nearly a century of economic cycles, Old Republic International (NYSE: ORI) is a diversified insurance holding company that provides property, liability, title, and mortgage guaranty insurance through its various subsidiaries.

Why Does ORI Give Us Pause?

1. Sluggish 5.2% annualized growth in net premiums earned over the last five years indicates the firm trailed its insurance peers
2. Earnings growth underperformed the sector average over the last two years as its EPS grew by just 9.5% annually
3. 8.2% annual book value per share growth over the last two years was slower than its insurance peers

At $39.58 per share, Old Republic International trades at 1.5x forward P/B. To fully understand why you should be careful with ORI, check out our full research report (it’s free).

Stocks We Like More

Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.

Take advantage of the rebound by checking 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 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

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