Despite mounting competition in the British grocery sector, shares in WM Morrison Supermarkets (LSE: MRW) continued to ascend in September. Indeed, the stock rose 10% in value during the month, and even struck two-and-a-half-year tops of 220p at one point.

Share pickers were encouraged by Morrisons’ half-year report released last month, which showed like-for-like sales rise 1.4% during February-July. Underlying sales have now risen for three consecutive quarters, leading many to believe that the supermarket’s troubles could finally be behind it.

And the company attempted to allay investor concerns over the impact of June’s EU vote on future revenues, Morrisons advising that while it’s “too early to know how the recent referendum result could affect the British economy… we have seen no negative impact on customer sentiment or customer behaviour.”

But Morrisons is still far from out of the woods, in my opinion. Aside from the ‘Brexit effect’ in the coming months and years, the Bradford chain is having to paddle seriously hard to get sales back into the black. Morrisons was forced to launch dozens more price cuts across the store last month in its bid to battle back against the discounters.

And I can’t help but feel that these profits-denting measures represent little more than a temporary sticking plaster, with Aldi and Lidl both turbocharging their store expansion programmes, and Amazon ramping up its recently-launched online proposition.

I would like to see Morrisons rely on more than simple price slashing to take on its rivals. And I reckon a forward P/E rating of 20.8 times — whooshing above the FTSE 100 (INDEXFTSE: UKX) average of 15 times — is far too high given the firm’s still-fragile earnings outlook.

Commodities clanger

But Morrisons isn’t the only risk-heavy stock enjoying a price resurgence in recent weeks. Raw materials giant BHP Billiton (LSE: BLT), for example, has seen its share value ascend 17% during September, the digger hitting its highest since last October in the process.

And like its FTSE 100 compatriot, BHP Billiton continues to defy gravity in my opinion, the firm remaining buoyant despite the perilous supply/demand picture washing over its main markets.

From iron ore and coal to copper and oil, prices across many of BHP Billiton’s critical markets remain very much in danger of fresh collapse as producers ramp up capacity across the commodities spectrum, and Chinese demand indicators remain flaky at best.

Indeed, latest Caixin PMI manufacturing data from the country last week came in at 50.1, perching precariously on the expansionary/contractionary watermark.

Sure, BHP Billiton may be pulling out all the stops to mitigate further revenues troubles by reducing capital wastage — unit cash costs across the group dropped 16% during the 12 months to June 2016. But these measures are of course insufficient on their own to get earnings firing again.

Considering BHP Billiton’s shaky growth outlook, I reckon a forward P/E ratio of 26.8 times creates poor value for money, and believe this high multiple leaves plenty of room for a painful share price reversal.

Stash the cash with this winner

But don't let BHP Billiton and Morrisons dent your investment appetite. There are plenty of London-quoted lovelies waiting to generate stunning returns for shrewd investors, after all.

For instance, The Motley Fool's  A Top Growth Share wealth report identifies a brilliant FTSE 250 stock with a terrific track record of earnings growth, and whose ambitious expansion scheme should continue to power profits through the roof.

Click here to enjoy this exclusive wealth report.  It's 100% free and can be sent straight to your inbox.

Royston Wild has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.