In a perfect world, stocks would move in tandem with their company’s underlying results. They’d also move proportionally with those results, meaning modest earnings growth would lead to a modest appreciation in a stock’s price, while high growth rates would send a stock skyrocketing.
The thing is, we don’t live or trade in a perfect world — stocks can and do get overheated, running up to levels that aren’t justified no matter how you slice it. Those runups never last forever, though.
Here are five of these stocks that have come too far, too fast, and are poised to pull back soon: