5 Overvalued Stocks to Take Profits On Now

Valuation issues are often ignored when stocks go parabolic on a daily basis.

But now that markets have gotten choppy and the chip momentum trade has broken down, value is once again on investors’ radar as winners and losers begin to emerge.

So it’s a good time to take profits.

That’s always easier said than done, as no one wants to miss another leg up after selling their shares.

So today we’re looking at five stocks with market caps above $2 billion, each one up more than 40% this year and with warning signs flashing that it’s time to take profits.

Iron Mountain Inc.

Edge Value Score: 13.97 Iron Mountain (NYSE: IRM ) offers information management systems that help clients secure physical and digital assets.

The stock is up more than 40% year-to-date (YTD), thanks to higher-than-average revenue growth and has grown its market cap to nearly $35 billion.

But profitability is still a major concern.

The company only generated $144 million in income versus more than $7 billion in revenue over the trailing 12-month period, and the stock trades at 58 times forward earnings and 4.8 times sales.

The balance sheet also looks rough with more than $19 billion in long-term debt and very little cash on hand.

If revenue decelerates, the high multiple could prompt a swift re-rating, and there’s evidence this transition is underway.

Despite the 40% YTD gain, cracks are forming on the daily chart.

Support at the 50-day moving average has given way, but this downtrend was hinted at last month when the Moving Average Convergence Divergence (MACD) and Relative Strength Index (RSI) indicators began trending in the wrong direction.

Now the RSI is firmly in bearish territory, and the MACD is about to flip negative, implying that this washout could just be getting started.

Carpenter Technology Corp.

Edge Value Score: 13.63 Carpenter Technology (NYSE: CRS ) has benefited from the defense spending boom thanks to its specialty metal fabrication used in the aerospace industry.

The stock has soared nearly 100% YTD, capping off an impressive 1,500% gain over the last five years.

A fiscal Q3 2026 earnings beat fueled the latest leg of the rally, but now the stock trades at nearly 63 times earnings and 10 times sales, a massive valuation compared to traditional aerospace powers like Lockheed Martin and RTX.

Carpenter Technology needs perfect execution to maintain its rally, and there are some hints that investors are taking profits ahead of the fiscal Q4 2026 report on July 30.

The uptrend still has strong support at the 50-day moving average, but the MACD and RSI are at extremely oversold levels.

A bearish MACD cross is the first hint that CRS investors are cashing in their chips, and the rally is definitely losing momentum this high above the 50-day SMA.

A retest of the 50-day is likely from here, so taking profits (or waiting for a better entry point) is a logical decision.

Qnity Electronics Inc.

Edge Value Score: 17.06 Qnity (NYSE: Q ) is a spinoff from Dupont and has only been trading since late 2025.

The company sells specialty chemicals and materials to the semiconductor industry, and the stock’s debut has been lucrative with an 80% YTD gain.

But the modest free cash flow yield (2.7%) is a concern for a vehicle that no longer has the deep Dupont balance sheet to help weather any storms.

The stock also trades at 45 times earnings and 5.9 times sales, a richer valuation than more established peers like Lam Research and Applied Materials.

Qnity’s charmed first year is facing its first real technical challenge.

The stock appears to have hit a ceiling around mid-May when the RSI and MACD both reached overbought levels simultaneously.

The stock continued to trade near all-time highs, but both indicators have been steadily descending for the last six weeks.

The MACD is now threatening to swing negative as the share price takes out the 50-day moving average, two strong pieces of evidence indicating this rally is about to take a breather.

Manchester United PLC Edge Value Score: 14.66 Soccer fever isn’t just pulsing through the United States; it’s also got the stock market revved up thanks to Manchester United’s (NYSE: MANU ) new stadium proposal.

The renowned English Premier League (EPL) team is also publicly traded on the NYSE, and its land deal to replace Old Trafford with a new 100,000-seat stadium has helped the stock surge 42% YTD.

But like the World Cup, all good things eventually come to an end, and this stadium-influenced gain appears to be running out of steam.

MANU lost a week of revenue due to EPL World Cup postponements, and Q4 has traditionally been the organization’s weakest quarter.