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. All that said, here are three stocks that are likely overheated and some you should look into instead.

First Interstate BancSystem (FIBK)

One-Month Return: +7.7%

Tracing its roots back to 1971 and still guided by founding family principles, First Interstate BancSystem (NASDAQ: FIBK) operates a network of community banks across 14 western and midwestern states, offering comprehensive banking services to individuals, businesses, and government entities.

Why Do We Steer Clear of FIBK?

1. Sales tumbled by 4.3% annually over the last two years, showing market trends are working against its favor during this cycle
2. Projected net interest income decline of 1.4% for the next 12 months points to a tough demand environment ahead
3. Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 1.9% annually

At $35.69 per share, First Interstate BancSystem trades at 1.1x forward P/B. To fully understand why you should be careful with FIBK, check out our full research report (it’s free for active Edge members).

Ladder Capital (LADR)

One-Month Return: +1.5%

Founded during the 2008 financial crisis when traditional lenders retreated from commercial real estate, Ladder Capital (NYSE: LADR) is a real estate investment trust that originates commercial real estate loans, owns commercial properties, and invests in real estate securities.

Why Is LADR Risky?

1. Sales tumbled by 15.4% annually over the last two years, showing market trends are working against its favor during this cycle
2. Earnings per share were flat over the last five years while its revenue grew, showing its incremental sales were less profitable
3. Tangible book value per share stagnated over the last five years, limiting its ability to leverage its balance sheet to make additional investments

Ladder Capital’s stock price of $11.25 implies a valuation ratio of 1x forward P/B. Dive into our free research report to see why there are better opportunities than LADR.

Truist Financial (TFC)

One-Month Return: +9.9%

Born from the 2019 merger of BB&T and SunTrust in one of the largest banking combinations since the 2008 financial crisis, Truist Financial (NYSE: TFC) is a bank holding company that offers a wide range of financial services including consumer and commercial banking, wealth management, insurance, and lending solutions.

Why Do We Avoid TFC?

1. Large revenue base makes it harder to expand quickly, and its annual net interest income growth of 2.5% over the last five years was below our standards for the banking sector
2. Flat earnings per share over the last five years underperformed the sector average
3. Below-average return on equity indicates management struggled to find compelling investment opportunities

Truist Financial is trading at $50.92 per share, or 1.1x forward P/B. Check out our free in-depth research report to learn more about why TFC doesn’t pass our bar.

Stocks We Like More

The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in 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-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.