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.

While momentum can be a leading indicator, it has burned many investors as it doesn’t always correlate with long-term success. Keeping that in mind, here are three stocks that are likely overheated and some you should look into instead.

Acushnet (GOLF)

One-Month Return: +2.2%

Producer of the acclaimed Titleist Pro V1 golf ball, Acushnet (NYSE: GOLF) is a design and manufacturing company specializing in performance-driven golf products.

Why Do We Think Twice About GOLF?

1. Sales trends were unexciting over the last two years as its 2.2% annual growth was below the typical consumer discretionary company
2. Sales are projected to remain flat over the next 12 months as demand decelerates from its two-year trend
3. Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital

Acushnet’s stock price of $72.74 implies a valuation ratio of 19.5x forward P/E. To fully understand why you should be careful with GOLF, check out our full research report (it’s free).

Teledyne (TDY)

One-Month Return: +0.9%

Playing a role in mapping the ocean floor as we know it today, Teledyne (NYSE: TDY) offers digital imaging and instrumentation products for various industries.

Why Are We Wary of TDY?

1. Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
2. Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 4.5% annually
3. ROIC of 7.7% reflects management’s challenges in identifying attractive investment opportunities, and its shrinking returns suggest its past profit sources are losing steam

At $498.24 per share, Teledyne trades at 22.4x forward P/E. Check out our free in-depth research report to learn more about why TDY doesn’t pass our bar.

Ducommun (DCO)

One-Month Return: +12.2%

California’s oldest company, Ducommun (NYSE: DCO) is a provider of engineering and manufacturing services for high-performance products primarily within the aerospace and defense industries.

Why Do We Think DCO Will Underperform?

1. Average backlog growth of 4.8% over the past two years was mediocre and suggests fewer customers signed long-term contracts
2. Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 1.1% for the last five years
3. Below-average returns on capital indicate management struggled to find compelling investment opportunities

Ducommun is trading at $74.62 per share, or 19.5x forward P/E. Read our free research report to see why you should think twice about including DCO in your portfolio.

High-Quality Stocks for All Market Conditions

Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.

While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like 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 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.