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Before diving into the discussion of overvalued stocks due for correction, we need to establish one thing about this list: every company you see here represents a fundamentally sound business. In other words, the focus of this narrative centers on trimming exposure. We’re absolutely not here to discuss shorting embattled organizations, which is a different topic for a different day.

While arguably most people define market success as picking winners, the holistic definition also involves knowing when to get out while the going’s good. Whether we’re talking about virtual currencies or high-flying stocks to crash, practically every tradable asset moves in cyclical fashion. So, when your holdings appear too overheated, it may be time to let go.

Another advantage of trimming risky overhyped stocks centers on the cyclical discount mechanism. If you manage to sell your hot holdings at or near the top, you can always buy back the same security at a lower price. With that, here are some good names that just extended themselves a bit too much.

Trade Desk (TTD)

At first glance, Trade Desk (NASDAQ:TTD) wouldn’t seem an ideal candidate to short and that’s because it’s not. Since the beginning of this year, TTD shot up nearly 59%. A technology firm that empowers buyers of advertising, Trade Desk revolutionizes the space through its self-service, cloud-based platform. Here, ad buyers can create, manage and optimize digital advertising campaigns across ad formats and devices.

Still, one of the fundamental risks that might make TTD one of the overvalued stocks due for correction is the digital ad market itself. With consumers struggling with both inflation and record-high household debt, people have trimmed their discretionary spending. In turn, advertisers may continue to respond, leading to a potential downward cycle.

Also, the financial realities are difficult to ignore. Thanks to TTD skyrocketing recently, it sports hefty premiums. Right now, shares trade at a trailing multiple of 466.53. They also trade at a forward multiple of 214.36. Against operational metrics, the market prices TTD at 21.07-times trailing sales. As a result, it might be one of the high-flying stocks to crash (at least temporarily).

First Solar (FSLR)

Headquartered in Tempe, Arizona, First Solar (NASDAQ:FSLR) is a leading global provider of comprehensive photovoltaic (PV) solar solutions, which use its advanced module and system technology. Further, the company’s integrated power plant solutions deliver an economically attractive alternative to fossil-fuel electricity generation today. Clearly, the retail investor community responded vigorously to First Solar’s potential. Since the Jan. opener, FSLR popped up nearly 39%.

However, investment resource Gurufocus warns its readers that the enterprise may be significantly overvalued. A major clue that FSLR could be one of the overvalued stocks due for correction centers on operations. Presently, the company suffers a three-year revenue growth rate of 5.5% below zero. Also, its operating margin sits at 7.25% below breakeven.

To be fair, First Solar’s strong cash-to-debt ratio of 6.17 suggests a catastrophic implosion is not on the table. Nevertheless, FSLR’s trailing multiple stands at nearly 519. Now, its forward multiple is more manageable at 25.16, but this too is a bit worse than middling. With a staggering price-earnings-growth ratio of 42.54, FLSR might be one of the risky overhyped stocks.

Penumbra (PEN)

Based in Alameda, California, Penumbra (NYSE:PEN) is a global healthcare company focused on innovative therapies. Per its public profile, the company designs, develops, manufactures and markets novel products and has a broad portfolio that addresses challenging medical conditions in markets with significant unmet need. As with the other overvalued stocks due for correction, investors responded positively to PEN. Since the start of the year, shares soared over 40%.

While enjoying various scientific relevancies, not every financial metric undergirding Penumbra favors PEN stock. For example, its three-year EBITDA growth rate slipped to 19.4% below zero. And both its operating and net margins rank slightly better than sector average.

Most worryingly under the context of high-risk stocks to crash soon, PEN incurs hefty premiums. As an example, the market prices shares at a forward multiple of 258.11, worse than practically every other company in the medical devices and instruments segment.

Also, PEN trades at 13.32-times sales and 11.6-times book value. Both rate as significantly overvalued relative to industry norms, making it one of the stocks with potential downfall.

Rambus (RMBS)

Hailing from Sunnyvale, California, Rambus (NASDAQ:RMBS) is a provider of industry-leading chips and silicon intellectual property making data faster and safer. Leveraging 30 years of advanced semiconductor experience, it’s a pioneer in high-performance memory subsystems that solve the bottleneck between memory and processing for data-intensive systems. Since the beginning of this year, RMBS shot up over 87%.

Again, we’re talking about a relevant organization with solid financials so you shouldn’t short RMBS. For example, Rambus commands an Altman Z-Score of 22.06, indicating high fiscal stability and extremely low risk of bankruptcy. Also, its three-year revenue growth rate clocks in at 26.5%, beating out 81% of its rivals.

However, investors pay more than a pretty penny for that performance, making RMBS one of the overvalued stocks due for correction. Specifically, RMBS trades at 15.48-times trailing sales, worse than 89.68% of the competition. Also, for good measure, Gurufocus labels Rambus significantly overvalued. With a price-earnings ratio of 133.77, RMBS may be one of the high-flying stocks to crash.

Vita Coco (COCO)

Founded in 2004, Vita Coco (NASDAQ:COCO) develops, markets, and distributes coconut water products under the brand name Vita Coco in the U.S., Canada, Europe, the Middle East and the Asia Pacific. Loved by its legions of loyal fans, Vita Coco offers a variety of flavors and product categories, including coconut oil, coconut milk, sparking water and a natural energy drink. Since the Jan. opener, COCO skyrocketed 94%.

Undeniably, the brand carries significant influence. Better yet, it prints several positive financial metrics. Notably, its cash-to-debt ratio clocks in at 676.28, beating out 94.23% of companies listed in the (non-alcoholic) beverage space. Also, its Altman Z-Score of 18.75 means that Vita probably won’t face a bankruptcy hearing anytime soon.

However, the issue that makes COCO one of the overvalued stocks due for correction is the underlying premiums. For instance, COCCO trades at 74.76-times free cash flow. In contrast, the sector median value is only 20.82 times. As well, the market prices COCO at nearly 47-times forward earnings. As a discount to projected earnings, Vita Coco ranks worse than nearly 93% of the field.

Maui Land & Pineapple (MLP)

Based in Hawaii, Maui Land & Pineapple (NYSE:MLP) is a landholding and operating company dedicated to agriculture, resort operation and the creation and management of holistic communities. Maui Land owns approximately 22,000 acres on the island of Maui, where it operates the Kapalua Resort community. Given resurgent travel interest, MLP has attracted attention. Since the start of the year, shares popped up nearly 25%.

To clarify, Maui Lands represents an outstanding enterprise financially. Therefore, investors shouldn’t think about shorting MLP stock. For example, the company incurs zero debt, affording it excellent flexibility during these uncertain times. As well, its Altman Z-Score clocks in at 14.95, indicating extremely low risk of bankruptcy.

However, investors again pay for the performance. Maui’s three-year revenue growth rate impresses at 27.3%. Unfortunately, MLP trades at 10.95-times sales, worse than 86% of its peers. As well, it trades at a trailing multiple of 237, worse than over 97% of its peers. Thus, it’s one of the overvalued stocks due for correction.

TRX Gold (TRX)

Headquartered in Oakville, Ontario in Canada, TRX Gold (NYSEAMERICAN:TRX) specializes in the precious metals mining sector. According to its public profile, TRX is building a significant gold project at Buckreef in Tanzania with its joint venture partner Stamico. Since the beginning of this year, TRX gained almost 27% of equity value.

However, shares trade hands at only 44 cents a pop. That right there is a big clue that TRX may qualify for overvalued stocks due for correction. Unfortunately, such speculative entities print unpredictable dynamics. Sure enough, in the trailing one-month period, TRX slipped 18%.

Even with that “discount,” TRX seems incredibly pricey. For example, shares trade at 221.5-times trailing earnings, ranking worse than 99% of the metals and mining industry. In fairness, TRX trades at a forward multiple of only 4.48. However, its difficult to give much credence to this stat considering its consistent net losses.

As well, its PEG ratio stands at 8.39 times. In contrast, the sector median value is only 0.85 times, ranking worse than 97.63% of the competition. Thus, TRX might be a candidate for high-flying stocks to crash.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

This article is an excerpt from the InvestorPlace Digest newsletter. To get news like this delivered straight to your inbox, click here.

When I needed a new vacuum cleaner last month, I knew exactly where to go:

Bed Bath & Beyond (OTCMKTS:BBBYQ).

The New Jersey-based retailer, which filed for Chapter 11 on April 23, had been on bankruptcy watch since February when creditors and suppliers began yanking liquidity. We’d all seen this story before, and InvestorPlace.com writer Thomas Niel pulled no punches in an analysis a couple of weeks before BBBY’s bankruptcy filing.

Time to use those expiring coupons!

At the time, many retail investors seemed entirely caught off guard. Meme investors were still buying until the very end, and some are still holding on.

“I think that Bed Bath & Beyond, even in bankruptcy, is one of the best deals in the stock market,” one 25-year-old investor said in an interview with The Wall Street Journal earlier this month. The newspaper noted how many BBBY investors remain committed, even as shares moved onto the over-the-counter (OTC) exchange.

Nevertheless, we’ve begun noticing a shift away from meme stocks and iffy cryptos. Our editor’s inbox has seen an uptick in readers thanking us for bearish takes (a rarity!), and articles like Omor Ibne Ehsan’s “3 Cryptos to Sell in May and Go Away” have received heavy readership. It’s a clear sign that the bottom is finally falling out of the meme stock frenzy.

We know you probably haven’t bought these speculative stocks before… and that you likely never will. But in case you have, here are five meme stocks to sell while you still can.

1. Mullen Automotive (MULN): A Meme Stock Collapses

In January, I wrote how electric vehicle startup Mullen Automotive (NASDAQ:MULN) had become the new Dogecoin (DOGE-USD) with none of the fun. Fans of the zero-revenue company seemed more interested in proving how right they were about the stock than making money.

It took a 1-for-25 reverse stock split on May 4 for others to feel the same way. Suddenly, former fanatics began realizing that management seemed more committed to enriching insiders than rewarding external shareholders. For many, the reverse split turned out to be the last straw.

InvestorPlace.com Assistant News Writer Eddie Pan has been carefully documenting the precipitous fall in Mullen’s share price. David Moadel has also recently published a piece warning investors to get out immediately. As the world’s top meme stock continues to drown in dilutive stock, don’t be surprised if the firm declares bankruptcy sooner than expected.

2. Plug Power (PLUG): Trying New Tactics

Shares of once-promising Plug Power (NASDAQ:PLUG) have fallen by a third this year as competition heats up in the green energy space. As Louis Navellier and his team noted earlier this month for InvestorPlace.com:

Let’s be frank about this. There are plenty of businesses out there already, including some publicly traded ones, that are already in the EV charging business. Plug Power won’t be a first, second or third mover in this highly competitive field.

Essentially, Plug Power’s hydrogen fuel cell technology is quickly falling behind lithium-ion technologies. Attempts to escape into EV charging expose the firm to competition from better-funded rivals.

Retail investors are also beginning to abandon the stock. According to data from Fintel, the estimated share of retail investors has fallen by a third since October. Shares are down 30% since January, and Louis continues to warn investors to stay away.

3. Lordstown Motors (RIDE): A Slow Flameout

Often, meme stock investors stick around for longer than you might expect.

In 2020, as we reported at InvestorPlace.com, the Ohio-based Lordstown Motors (NASDAQ:RIDE) looked ready to fall to $0. The electric pickup startup was using inflated figures to hide the lack of any meaningful preorders and was “selling pickups to Wall Street instead of Main Street.” The short sellers at Hindenburg Research would publish a similar critique four months later.

It would take another two years for RIDE shares to sink below $1, which happened this March. And then, things got even worse. By May, shares had collapsed to 28 cents, forcing the firm to reverse-split its shares. The acceleration of Lordstown’s fall has been closely documented by William White at InvestorPlace.com.

Recent market data from Fintel shows us that available shares for sorting have fallen to near zero as short sellers outnumber buyers. History tells us these events are highly bearish signs, and retail investors are, for once, beginning to listen.

4. Pepe Coin (PEPE-USD): Mixing Memes and Madness

In early May, prices of meme cryptocurrency Pepe Coin (PEPE-USD) rose 20-fold on speculative purchasing. Its unrelated BRC-20 token would see even greater percentage gains.

But as we know… easy come, easy go.

Omor Ibne Ehsan was quick to document at InvestorPlace.com how meme coins – especially Pepe – “are not worth it, especially not near their peak.”

I’ve seen this story before with other meme coins. Dogecoin, the original dog-themed meme coin, has crashed over 88% since its peak. Apecoin (APE-USD), another meme coin that I warned about a few months after its launch, has virtually stopped being relevant after dropping 91.5%-plus from its all-time high.

Pepe is a sell, as it offers no long-term potential and is likely to keep sliding downwards.

Interest in meme coins has continued to sputter, suggesting Pepe Coin will continue to fall. Full turnover of the meme coin’s market capitalization now takes around four days, up from 20 hours earlier this month. Ethereum transaction fees – which spiked in early May on speculative meme coin trading – are down 50%.

To most investors, Pepe would seem like an obvious dud. But with a $500 million market capitalization, there’s surely more downside to be had.

5. AMC (AMC): Dethroning the King of the Apes

Finally, retail investors are beginning to lose interest in AMC Entertainment (NYSE:AMC), one of the biggest meme stocks of all. The cinema chain has seen a rapid decline in retail ownership this year, as noted by Fintel. Estimated retail ownership has declined by about 50% since December and is 70% lower than it was this time last year.

Over at InvestorPlace.com, David Moadel and Eddie Pan have also been documenting sales by institutional investors. Recent filings reveal that Bridgewater Associates sold its entire AMC position during this year’s first quarter, while Antara Capital dumped 2 million units of AMC Preferred Equity Units (NYSE:APE).

One major cause is the upcoming merge between AMC’s common stock with its APE preferred shares. The dilutive event has been stalled by Delaware courts, leaving fundraising efforts in limbo.

This will leave America’s largest theater chain with limited cash in the near term. The company is already down to $496 million in liquidity, down from $1.2 billion last June. Unless the firm can raise fresh equity capital soon, CEO Adam Aron will be forced to turn back to the debt markets that almost sank the firm once before.

Investors once hoped that AMC could consolidate the industry and become a rare meme-stock success story. Waning interest from primate-themed investors is now throwing that into question.

The School of Hard Knocks

Every experienced investor will have a story of their worst investment. Warren Buffett himself admitted in 2007 that his investment in no-moat Dexter Shoes was an utter disaster.

I’ll make more mistakes in the future – you can bet on that. A line from Bobby Bare’s country song explains what too often happens with acquisitions: “I’ve never gone to bed with an ugly woman, but I’ve sure woke up with a few.”

Nevertheless, top investors all learn from their mistakes. Buffett now rarely uses Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B) stock to fund deals, knowing these stock-for-stock deals will compound any problems.

After more than two years of meme madness, retail investors also finally seem to be learning from their mistakes. Turnover and ownership in these speculative assets are down 50% or more, and we have noticed a clear change in sentiment from our readers.

It’s surely been an expensive lesson. Companies like Bed Bath & Beyond destroyed billions of shareholder value toward the end of their existence. But all experienced investors know that the School of Hard Knocks never comes cheap.

As of this writing, Tom Yeung did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.