The broad-based S&P 500 has now fallen in five-straight sessions, yet yesterday's new 52-week highs outpaced new lows by practically 10-to-1! For skeptics like me, that's an opportunity to see whether companies have earned their current valuations.

Keep in mind that some companies deserve their current valuations. Take Applied Materials (AMAT -2.34%), for example, which rocketed higher this week after announcing an all-stock deal to acquire Japan's Tokyo Electron for $9.3 billion. The deal, barring regulatory approval in various countries, will combine the No. 1 and No. 3 chip-equipment makers in the world and allow for unparalleled cost synergies and pricing power for Applied Materials. This is the type of deal that'll fuel growth for a decade to come!

Still, other companies might deserve a kick in the pants. Here's a look at three companies that could be worth selling.

If the name fits...
It's been a wild but generally profitable ride for shareholders in consulting firm Heidrick & Struggles (HSII 3.25%) over the past year. The company, which helps companies find senior-level management and provides consulting on a recurring basis, has benefited from ongoing changes in senior management throughout the marketplace as companies look to cut costs and, in some cases, management positions, to save money.

But I have a suspicion that the company could be in for some "struggles" of its own over the near-term with it undergoing a CEO transition of its own and dealing with a good amount of bottom line uncertainty.

Shares of the company actually dove as much as 16% briefly in July when it noted that its CEO, L. Kevin Kelly, was stepping down from his post, but remaining with the company at a different executive position. CEO transitions are never easy on shareholders as they'll assume the company will lose its momentum and direction. That concern can be manifested even further because Heidrick & Struggles has missed Wall Street's EPS projections by a mile in three consecutive quarters. Ultimately, ongoing weakness in Europe and slowing growth in Asia is hampering its overseas operations and dragged down its bottom line.

What we're left with is nothing more than a niche staffing company that's growing by about 5% a year but is wholly dependent on the economy and is trading at a frothy 25 times forward earnings. This gives me more than enough reason to believe that this rally will soon fizzle out.

Check your expectations
Speaking of checking your lofty expectations at the door, what on Earth is up with broadcast network Media General (NYSE: MEG) of late? The company has been a on tear since it announced an all-stock merger agreement with privately held New Young Broadcasting that would bring Media General's 18 network-affiliated stations and New Young's 12 all under one roof. Obviously, with less competition cost synergies are the top benefit here. The combination also brings with it significant tax-loss net carryovers which Media General can use to offset profits in the upcoming years .

But is all this enthusiasm really worthwhile? If we look around we are seeing broadcasting M&A at every turn. Gannett purchased Belo for $2.2 billion to diversify its broadcasting business and rumors have been swirling for months that Charter Communications is shopping for a purchase. Media General, though, isn't on anyone's radar.

The likely reason is that Media General hasn't turned an annual profit since 2007 and has completely devoured any shareholder equity that existed in the company prior to the recession. What we have left is a company that's been trimming costs, selling its publishing business, and crossing its fingers that political ads help boost its bottom line. Sure, Media General is carrying around a horse trough's worth of carryover tax losses, but it needs to turn an annual profit first before it'll have a chance to reap those tax benefits -- no easy task for this company. In addition, as Fool Ryan Palmer pointed out earlier this month, Media General is currently paying a steep 10% interest rate on a loan from Berkshire Hathaway, meaning it's paying more on interest than what it's bringing in from its operations!

I'm not saying Media General's purchase of New Young Broadcasting will bad over the long run, because the geographic diversity and cost savings should eventually help its bottom line. But after five profitless years and at 34 times cash flow, I don't believe that shareholders should be in a very forgiving mood with regard to accepting poor results and ongoing losses moving forward.

Wait for concrete results
Have you been wondering why we're witnessing so many clinical-stage biotechnology companies going public recently? It's because M&A activity and perceived pipeline valuations are at their highest levels in more than a decade, creating the perfect opportunity for early- and mid-stage biotech companies to IPO and obtain the precious cash infusion they need to keep their research going.

One such company that's taken this to heart is Stemline Therapeutics (STML). Since it debuted, shares have quadrupled on the heels of positive phase 1 results for SL-401, a targeted-cancer therapeutic aimed at the interleukin-3 receptor that inhibits the growth of leukemia stem cells in patients with acute myeloid leukemia and blastic plasmacytoid dendritic cell neoplasm. The experimental drug has also shown preclinical effects in treating chronic myeloid leukemia. Specifically, in phase 1 trials SL-401 as a third-line (or greater) therapy for AML provided a median overall survival of 3.6 months compared to the current standard which is just 1.5 months.

Are these results impressive? Absolutely! If SL-401 and SL-701, which is being developed to treat pediatric and adult gliomas, do their job, Stemline could be worth a lot more and patients of these diseases could be in line for a higher quality of life. Stemline's approach to target cancer stem cells is also unique. But can we really throw a 300% gain behind a few very early stage results? I don't think it's wise.

A recent study from the Centre for Medicines Research International in the UK noted that 82% of all mid-stage trials end in failure while half of all phase 3 trials fail. Tallying this up, only 9% of all phase 1 successes will make it through phase 3 clinical trials. Those aren't very good odds.

So, what should you do? I'd suggest at least waiting for concrete mid-stage data. Might you miss out on some upside if the results are good? It's certainly a possibility. But the downside risk here of less than stellar results for SL-401 outweighs the upside potential of already baked in phenomenal results.

Foolish roundup
This week's theme is all about keeping your expectations reasonable. As investors we're certainly happy to see Heidrick & Struggles grow its domestic sales, Media General trim its costs through merger synergies, and Stemline report impressive phase 1 results. In reality, though, Heidrick & Struggles' growth rate is just a meager 5%, Media General can't bring in more than it's paying in interest, and Stemline is still a long way away from having a large patient pool of data.

I'm so confident in my three calls that I plan to make a CAPScall of underperform on each one. The question is: Would you do the same?