Expensive stocks often command premium valuations because the market thinks their business models are exceptional. However, the downside is that high expectations are already baked into their prices, leaving little room for error if they stumble even slightly.

Determining whether a company’s quality justifies its price causes headaches for nearly all investors, which is why we started StockStory - to help you separate the real opportunities from the speculative ones. That said, here is one high-flying stock to hold for the long term and two with big downside risk.

Two High-Flying Stocks to Sell:

Deere (DE)

Forward P/E Ratio: 32.9x

Revolutionizing agriculture with the first self-polishing cast-steel plow in the 1800s, Deere (NYSE: DE) manufactures and distributes advanced agricultural, construction, forestry, and turf care equipment.

Why Do We Avoid DE?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 12.3% annually over the last two years
2. Eroding returns on capital suggest its historical profit centers are aging
3. 7× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings

Deere’s stock price of $605.88 implies a valuation ratio of 32.9x forward P/E. If you’re considering DE for your portfolio, see our FREE research report to learn more.

Novanta (NOVT)

Forward P/E Ratio: 34.7x

Originally a pioneer in the laser scanning industry during the late 1960s, Novanta (NASDAQ: NOVT) offers medicine and manufacturing technology to the medical, life sciences, and manufacturing industries.

Why Does NOVT Give Us Pause?

1. Annual revenue growth of 5.5% over the last two years was below our standards for the industrials sector
2. Performance over the past two years shows its incremental sales were less profitable, as its 4.2% annual earnings per share growth trailed its revenue gains
3. Free cash flow margin shrank by 5.6 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive

Novanta is trading at $125.34 per share, or 34.7x forward P/E. To fully understand why you should be careful with NOVT, check out our full research report (it’s free).

One High-Flying Stock to Buy:

Amphenol (APH)

Forward P/E Ratio: 31.4x

With over 90 years of connecting the world's technologies, Amphenol (NYSE: APH) designs and manufactures connectors, cables, sensors, and interconnect systems that enable electrical and electronic connections across virtually every industry.

Why Will APH Beat the Market?

1. Annual revenue growth of 35.6% over the past two years was outstanding, reflecting market share gains this cycle
2. Incremental sales over the last two years have been highly profitable as its earnings per share increased by 49% annually, topping its revenue gains
3. Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its rising cash conversion increases its margin of safety

At $141.75 per share, Amphenol trades at 31.4x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.

Stocks We Like Even More

ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren't just high-quality businesses. Something is happening with them right now. Elite fundamentals meeting near-term momentum — both boxes checked at the same time.

Find out which stocks our AI platform is flagging this week. See this week's Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.

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.