The 3 Most Overvalued Stocks Top Managers Are Selling in 2025
The best fund managers are scaling back in these expensive stocks this year.
Susan Dziubinski: I’m Susan Dziubinski with Morningstar. A few times each year, we take a look at what stocks some of the best fund managers have been buying and selling. Who are these best managers? They’re active managers whose funds land in one of Morningstar’s US large-cap categories. Their funds earn Morningstar Medalist Ratings of Bronze or better, and their portfolios include 50 stocks or less. Each quarter, we compile a list of the stocks that these fine stock-pickers have been buying and selling.
Today, we’re looking at three stocks that these managers have been scaling back in during 2025 that also look overvalued according to Morningstar.
The 3 Most Overvalued Stocks Top Managers Are Selling in 2025
The first overvalued stock top managers have been selling is Netflix NFLX. Netflix is the leading streaming platform globally, and we expect the company to maintain that position. We think Netflix has been able to carve out a narrow economic moat, which means we expect the company to remain competitive for a decade or more. Unlike its peers, Netflix has no legacy assets losing value, which allows it to focus on its core offering. Plus, it was a streaming pioneer, which provided it with a big head start in accumulating subscribers. Though there’s plenty to like about the business, Netflix is one of the most overvalued stocks our analysts cover. Morningstar thinks Netflix stock is worth $720.
Read Morningstar’s full report on Netflix.
The second overvalued stock top managers have been selling is Mastercard MA. Mastercard is the second-largest payment processor in the world. We think the company has carved out a wide economic moat, with a global electronic payment infrastructure that’s essentially unassailable. The company benefits from the ongoing shift toward electronic payments, regardless of whether the payment is credit, debit, or mobile. A downturn in the economy would, of course, slow overall growth, but we don’t see any secular industry trends that will interfere with Mastercard’s ability to maintain double-digit growth in the coming years. But shares look overvalued. We think Mastercard’s stock is worth $500.
Read Morningstar’s full report on Mastercard.
And the final overvalued stock top managers have been selling is Stryker SYK. Stryker is a top competitor in manufacturing medical devices across a variety of attractive medical markets, including orthopedic implants, surgical instruments, endoscopy, and neurovascular devices. We think the company has carved out a wide economic moat, and we expect Stryker to be able to continue its long record of innovation in its key markets and earn attractive profits. We like the company, but its stock is overpriced. We think Stryker’s stock is worth $306 and shares are trading well above that.
Read Morningstar’s full report on Stryker.
For more stock insights, visit Morningstar.com.
Morningstar senior analyst Matthew Dolgin, Brett Horn, and Debbie Wang provided the research behind this segment.
Watch The Surprising Stock That Top Fund Managers Are Selling for more from Susan Dziubinski.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.
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