Great things are happening to the stocks in this article. They’re all outperforming the market over the last month because of positive catalysts such as a new product line, constructive news flow, or even a loyal Reddit fanbase.
But not every company with momentum is a long-term winner, and plenty of investors have lost money betting on short-term fads. All that said, here are three stocks that are likely overheated and some you should look into instead.
Denny's (DENN)
One-Month Return: +21.7%
Open around the clock, Denny’s (NASDAQ: DENN) is a chain of diner restaurants serving breakfast and traditional American fare.
Why Should You Sell DENN?
- Disappointing same-store sales over the past two years show customers aren’t responding well to its menu offerings and dining experience
- Free cash flow margin dropped by 8.7 percentage points over the last year, implying the company became more capital intensive as competition picked up
- Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders
At $4.43 per share, Denny's trades at 8.8x forward P/E. Dive into our free research report to see why there are better opportunities than DENN.
AMN Healthcare Services (AMN)
One-Month Return: +13.8%
With a network of thousands of healthcare professionals ranging from nurses to physicians to executives, AMN Healthcare (NYSE: AMN) provides healthcare workforce solutions including temporary staffing, permanent placement, and technology platforms for hospitals and healthcare facilities across the United States.
Why Should You Dump AMN?
- Declining travelers on assignment over the past two years imply it may need to invest in improvements to get back on track
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 8.4% annually while its revenue grew
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
AMN Healthcare Services’s stock price of $19.84 implies a valuation ratio of 19.1x forward P/E. To fully understand why you should be careful with AMN, check out our full research report (it’s free).
Amneal (AMRX)
One-Month Return: +18.1%
Founded in 2002 and growing into one of America's largest generic drug producers, Amneal Pharmaceuticals (NASDAQ: AMRX) develops, manufactures, and distributes generic medicines, specialty branded drugs, biosimilars, and injectable products for the U.S. healthcare market.
Why Are We Hesitant About AMRX?
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
Amneal is trading at $9.40 per share, or 13.6x forward P/E. Check out our free in-depth research report to learn more about why AMRX doesn’t pass our bar.
High-Quality Stocks for All Market Conditions
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at 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 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
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