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buffalonate (51.02)

Most Overpriced Stocks?



April 10, 2011 – Comments (3) | RELATED TICKERS: CRM , OPEN.DL , QIHU.DL

My votes go to Qihoo 360 Technology(qihu) and Opentable(open) and Salesforce(crm).  Qihoo 360 Technology is a Chinese search engine with 8 million in profits and a 2.9 billion market cap.  Opentable makes online restaurant reservations and has a 2.5 billion market cap.  It is growing revenues at 40% and has a p/e ratio of 190.  Salesforce is a cloud computing software company that grew revenues last year 27% and earnings 50%.  It has a p/e ratio of 286 which makes this company overvalued by about 5 times by my numbers.  If you guys know of any other crazily priced stocks I would like to hear your ideas.   

3 Comments – Post Your Own

#1) On April 10, 2011 at 3:24 PM, Valyooo (38.19) wrote:

A company earning $1 a share with a 50% growth rate woud be earnings $17.09 a share in 7 years

So even if right now the P/E were 190, that would mean in 7 years it would be trading at a p/e of 11.  If it still had a good growth rate, it would be massively undervalued.

So even if it looks short term expensive, the future growth may be enough to justify it.

That in mind, TZOO, SINA, CMG, BIDU, NFLX fit your criteria

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#2) On April 10, 2011 at 4:49 PM, Varchild2008 (83.81) wrote:

HANS <---- Is my pick as most expensive.

Sure you can belch out growth rates all you want but in face of Q4 2010 earnings miss showing a rising cost and rising tax rate eating up profit margins for Hansen Natural Corp, then your growth rate argument is moot.

I am curious to see how HANS can somehow justify its P/E that's nearing 30, while Oil Prices and Sugar Prices are sky high.

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#3) On April 11, 2011 at 8:15 AM, voxraison (62.72) wrote:

CRM: benioff, the CEO has been 'instructed' by inst holders to stop selling, now down to a 'mere' 10 m shares. Excluding his mandated restriction, insiders have sold more than 80% of their existing holdings and any vested shares via options.

Check Fidelity's holding profile: selling stealthily. No one left holding the bag. What will happen, I know, when... I wish I knew!!

But the demise of QE..N! will definitely augment a more rational approach. How this has defied any esoteric valuation criteria outside of 1999-2001, is simply beyond me. And how every sell side analyst sings lyrical homilies is more baffling.

But then one day...there was reason, precipitated by.... and the clouds unleashed their fury.

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