The stocks featured in this article have all approached their 52-week highs. When these price levels hit, it typically signals strong business execution, positive market sentiment, or significant industry tailwinds.

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.

Ralph Lauren (RL)

One-Month Return: +2.5%

Originally founded as a necktie company, Ralph Lauren (NYSE: RL) is an iconic American fashion brand known for its classic and sophisticated style.

Why Do We Steer Clear of RL?

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. Subpar operating margin of 13.1% constrains its ability to invest in process improvements or effectively respond to new competitive threats
3. Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital

Ralph Lauren is trading at $366.96 per share, or 22.8x forward P/E. If you’re considering RL for your portfolio, see our FREE research report to learn more.

Standex (SXI)

One-Month Return: +5.5%

Holding over 500 patents globally, Standex (NYSE: SXI) is a manufacturer and distributor of industrial components for various sectors.

Why Are We Cautious About SXI?

1. 6% annual revenue growth over the last two years was slower than its industrials peers
2. Free cash flow margin dropped by 4.4 percentage points over the last five years, implying the company became more capital intensive as competition picked up
3. Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability

Standex’s stock price of $242.02 implies a valuation ratio of 28.3x forward P/E. To fully understand why you should be careful with SXI, check out our full research report (it’s free).

Frost Bank (CFR)

One-Month Return: +6.9%

Tracing its roots back to 1868 when it was founded during Texas's post-Civil War reconstruction era, Cullen/Frost Bankers (NYSE: CFR) operates Frost Bank, a Texas-based financial institution providing commercial and consumer banking, wealth management, and insurance services.

Why Are We Hesitant About CFR?

1. 4.9% annual revenue growth over the last two years was slower than its banking peers
2. Performance over the past two years shows its incremental sales were much less profitable, as its earnings per share fell by 3.6% annually
3. Projected tangible book value per share decline of 6.4% for the next 12 months points to tough credit quality challenges ahead

At $137.46 per share, Frost Bank trades at 2.1x forward P/B. If you’re considering CFR for your portfolio, see our FREE research report to learn more.

Stocks We Like More

Check out the high-quality names we’ve flagged in 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 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.