As equity markets continue to recover after the collapse earlier in the year, many shares are now overvalued, according to Morningstar analysts.
Investors looking to capitalise on lockdown trends have chased e-commerce, tech and healthcare stocks, driving valuations ever higher. Indeed, Tesla’s (TSLA) shares have soared 200% this year, for example, while Shopify (SHOP) is up nearly 140%. Such a rapid upward trajectory may not be a signal to buy, however – analysts warn many of these hot stocks are looking expensive.
UK Stocks to Avoid
We last looked stocks to avoid in April when valuations were starting to move higher after March’s sell-off.
To compile this list we look at stocks with an Uncertainty Rating of High or Very High, which have no Economic Moat, and which are rated as either one or two stars by Morningstar analysts, indicating that their shares are trading above their fair