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

Marriott (MAR)

One-Month Return: +9.8%

Founded by J. Willard Marriott in 1927, Marriott International (NASDAQ: MAR) is a global hospitality company with a portfolio of over 7,000 properties and 30 brands, spanning 130+ countries and territories.

Why Do We Avoid MAR?

1. Weak revenue per room over the past two years indicates challenges in maintaining pricing power and occupancy rates
2. Operating margin of 15.4% falls short of the industry average, and the smaller profit dollars make it harder to react to unexpected market developments
3. Projected 5.4 percentage point decline in its free cash flow margin next year reflects the company’s plans to increase its investments to defend its market position

Marriott’s stock price of $354.58 implies a valuation ratio of 31.2x forward P/E. Read our free research report to see why you should think twice about including MAR in your portfolio.

APi (APG)

One-Month Return: +2.6%

Started in 1926 as an insulation contractor, APi (NYSE: APG) provides life safety solutions and specialty services for buildings and infrastructure.

Why Do We Think Twice About APG?

1. Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
2. Poor expense management has led to an operating margin of 4.8% that is below the industry average
3. Below-average returns on capital indicate management struggled to find compelling investment opportunities

At $43.89 per share, APi trades at 27.5x forward P/E. If you’re considering APG for your portfolio, see our FREE research report to learn more.

Zurn Elkay (ZWS)

One-Month Return: +11.3%

Claiming to have saved more than 30 billion gallons of water, Zurn Elkay (NYSE: ZWS) provides water management solutions to various industries.

Why Are We Wary of ZWS?

1. Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
2. Issuance of new shares over the last five years caused its earnings per share to fall by 3% annually
3. Free cash flow margin shrank by 3.3 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive

Zurn Elkay is trading at $51.38 per share, or 31x forward P/E. Dive into our free research report to see why there are better opportunities than ZWS.

High-Quality Stocks for All Market Conditions

If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.

Don’t wait for the next volatility shock. Check 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 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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.