“You get what you pay for” often applies to expensive stocks with best-in-class business models and execution. While their quality can sometimes justify the premium, they typically experience elevated volatility during market downturns when expectations change.
Separating true intrinsic value from speculation isn’t easy, especially during bull markets. That’s where StockStory comes in - to help you find high-quality companies that will stand the test of time. Keeping that in mind, here are two high-flying stocks with strong fundamentals and one with big downside risk.
One High-Flying Stock to Sell:
Transocean (RIG)
Forward P/E Ratio: 31.9x
Operating one of the world's most capable fleets of ultra-deepwater drillships and harsh environment rigs, Transocean (NYSE: RIG) operates drilling rigs that energy companies rent to drill oil and gas wells in deep ocean waters.
Why Are We Bearish on RIG?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 3.2% annually over the last ten years
- Costly operations and weak unit economics result in an inferior gross margin of 37.9% that must be offset through higher production volumes
- Low free cash flow margin of 5.2% for the last five years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
Transocean is trading at $5.63 per share, or 31.9x forward P/E. Check out our free in-depth research report to learn more about why RIG doesn’t pass our bar.
Two High-Flying Stocks to Watch:
Fastenal (FAST)
Forward P/E Ratio: 37.6x
Founded in 1967, Fastenal (NASDAQ: FAST) provides industrial and construction supplies, including fasteners, tools, safety products, and many other product categories to businesses globally.
Why Is FAST on Our Radar?
- Superior product capabilities and pricing power are reflected in its best-in-class gross margin of 45.4%
- Highly efficient business model is illustrated by its impressive 20.4% operating margin
- Free cash flow margin increased by 5.1 percentage points over the last five years, giving the company more capital to invest or return to shareholders
At $51.03 per share, Fastenal trades at 37.6x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Bloom Energy (BE)
Forward P/E Ratio: 61.6x
Working in stealth mode for eight years, Bloom Energy (NYSE: BE) designs, manufactures, and markets solid oxide fuel cell systems for on-site power generation.
Why Do We Love BE?
- Annual revenue growth of 53.1% over the past two years was outstanding, reflecting market share gains this cycle
- Free cash flow profile has moved into positive territory over the last five years, showing the company has crossed a key inflection point
- Returns on capital are increasing as management’s prior bets are starting to bear fruit
Bloom Energy’s stock price of $227.25 implies a valuation ratio of 61.6x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
