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CNBC's Jim Cramer has a huge following due to his "Fast Money" television show and a number of very popular investment books. The mere mention of a stock on his show can cause it to spike higher in after hours trading, so when he regularly discusses a stock and gives it a buy rating repeatedly, it does appear to create significant investor demand. Cramer even suggests that investors wait a few days after he mentions a stock before they buy it because most of the stocks he gives a buy rating end up surging, at least in the short term. Over time, a stock Cramer has been favoring can reach much higher levels than it probably should. I think part of this comes from the frequent exposure the stock gets from Cramer and also because investors love to buy stocks that are going up. Buying often begets more buying, and certainly more short covering. This pattern can, over time, create incredible momentum in a stock. However, for many stocks extended valuations and extremely high expectations can lead a stock to suddenly lose momentum and head much lower. We recently saw this in stocks like Netflix (NASDAQ:NFLX). Here are a handful of stocks that many investors would say are showing signs of fatigue, are overpriced and poised to drop even more:

Starbucks Corporation (NASDAQ:SBUX) is a leading purveyor of premium coffee, tea and other food products. Coffee stocks have been very hot in this market. I would be careful right now and wait for this sector to correct and buy on dips only. Even after a recent drop this stock is still not that far off the 52 week high. The stock has a price to earnings ratio of about 25, which is probably too high in this economy, especially when there are so many stocks trading for 10 times earnings or less.

Here are some key points for SBUX:

  • Current share price: $38.17
  • The 52 week range is $22.50 to $41.11
  • Earnings estimates for 2011: $1.52 per share
  • Earnings estimates for 2012: $1.82 per share
  • Annual dividend: 52 cents per share which yields 1.3%

Nordstrom (NYSE:JWN) is a leading upscale retailer of clothing. This stock recently plunged to about $38 per share and has seen a solid rebound to about $47. I would use the rally to sell the stock. The economy and consumer confidence has taken a turn for the worst in the past few weeks and while upscale shoppers might still have money, they are likely to cut back on clothing purchases especially when you consider they have probably seen large declines in their stock portfolios.

Here are some key points for JWN:

  • Current share price: $46.65
  • The 52 week range is $28.44 to $52.15
  • Earnings estimates for 2011: $3.05 per share
  • Earnings estimates for 2012: $3.52 per share
  • Annual dividend: 92 cents per share which yields 1.9%

Yum! Brands, Inc. (NYSE:YUM) operates a variety of popular restaurants such as KFC, Taco Bell, Pizza Hut, and others. This stock has been acting weak and it looks ready to make new 52 week lows. This stock is in a downtrend and does not appear to have put in a solid bottom yet.

Here are some key points for YUM:

  • Current share price: $49.54
  • The 52 week range is $45.96 to $57.75
  • Earnings estimates for 2011: $2.85 per share
  • Earnings estimates for 2012: $3.21 per share
  • Annual dividend: $1.14 per share which yields 2.1%

Darden Restaurants, Inc. (NYSE:DRI) operates a number of well known restaurants such as Red Lobster and The Olive Garden. With the economy looking like it is entering a recession and consumer confidence down, earnings and guidance could disappoint investors in the future. However, Cramer gives this stock a buy rating. This stock is close to the 52 week low and looks like it will continue dropping. I think the current earnings estimates could be revised lower in the coming weeks.

Here are some key points for DRI:

  • Current share price: $43.49
  • The 52 week range is $42.37 to $53.81
  • Earnings estimates for 2011: $3.79 per share
  • Earnings estimates for 2012: $4.30 per share
  • Annual dividend: $1.72 per share which yields 3.7%

Baidu, Inc. (NASDAQ:BIDU) is based in China and is a leading search engine company. This stock has had an incredible run over the past few years. However, due to this run, the valuation is at nosebleed levels and was recently trading for about 50 times earnings. This stock was trading for about $147 in September and has seen a major drop of about 40% in just weeks. There is a good chance this stock will remain in a downtrend and make new lows soon. This is the only Chinese stock I have seen Cramer call a buy recently.

Here are some key points for BIDU:

  • Current share price: $110.29
  • The 52 week range is $94.33 to $165.96
  • Earnings estimates for 2011: $2.91 per share
  • Earnings estimates for 2012: $4.39 per share
  • Annual dividend: none

BJ's Restaurants (NASDAQ:BJRI) operates a number of casual dining restaurants across the United States. This stock fell from around the $55 level when the market corrected but it still could fall further due to stretched valuations. With barely over $1 per year in earnings, this stock has a high price to earnings ratio of about 40. There is a good chance that earnings estimates will be revised lower just as we have seen with other restaurant stocks recently. Cramer has given these shares a buy rating.

Here are some key points for BJRI :

  • Current share price: $44.77
  • The 52 week range is $26.82 to $56.64
  • Earnings estimates for 2011: $1.09 per share
  • Earnings estimates for 2012: $1.33 per share
  • Annual dividend: none

Whole Foods Market (NASDAQ:WFM) is a leading food retailer specializing on organic and natural products for health conscious consumers. I think this stock is overvalued, but Cramer gives it a buy rating. I don't see how Cramer can justify the valuation of this stock. I don't know of any grocery retailer that is trading for about 35 times earnings. This is a great company but if you pay too much for a stock, you can lose money even with the best companies. If this company misses on earnings or gives reduced guidance, it would be a long way back down to the 52 week low of about $34 per share.

Here are some key points for WFM:

  • Current share price: $67.07
  • The 52 week range is $34.04 to $73.33
  • Earnings estimates for 2011: $1.91 per share
  • Earnings estimates for 2012: $2.20 per share
  • Annual dividend: 40 cents per share which yields .6%

Chipotle Mexican Grill (NYSE:CMG) operates a number of restaurants that offer high quality and affordable Mexican foods. This stock has been a market leader but the price to earnings ratio is about 50, and that is much higher than most any other restaurant stocks. Cramer gives these shares a buy rating. Just as other restaurant stocks have recently reduced guidance, Chipotle might have to as well. Even if they don't, the stock appears to be overvalued. When overvalued stocks miss earnings or have even a slight problem, they can quickly go from hitting new highs to hitting lows just as Netflix has done this year.

Here are some key points for CMG:

  • Current share price: $313.14
  • The 52 week range is $171.24 to $346.78
  • Earnings estimates for 2011: $6.82 per share
  • Earnings estimates for 2012: $8.64 per share
  • Annual dividend: none

Data is sourced from Yahoo Finance. No guarantees or representations are made. Hawkinvest is not a registered investment advisor and does not provide specific investment advice. The information is for informational purposes only. You should always consult a financial advisor.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: Why These 7 Cramer Stock Favorites Should Be Sold Now