The Nasdaq 100 looks attractive based on earnings strength, especially if you consider it’s trading at an average price-to-earnings ratio of about 12.06x, just below its P/E of 12.31x on March 10, 2009.
Yet the index has rallied 112% since then, through Monday.? The culprit for stagnant valuation is? profits — the divisor in the equation — which have strengthened faster than stock prices.
The research outfit Bespoke points to the 19 most expensive index components ranked by recent P/E. An asterisk denotes those with year-to-date price declines. The stock prices could catch up, but buyer beware. Some names are cyclical transports, others are disappointments in the tech sphere:
- Amazon.com (AMZN) 54.8x
- Alexion Pharma (ALXN) 39.9x
- Sirius XM Radio (SIRI)36.5x
- Whole Foods Market (WFM) 32.6x
- Cerner (CERN) 30.8x
- Intuitive Surgical (ISRG) 30.4x
- Baidu (BIDU) 29.9x
- Green Mountain Coffee (GMCR) 27.7x
- Stericycle (SRCL) 26.6x
- Fastenal (FAST) 26.6x
- CH Robinson Worldwide (CHRW) 24.7x*
- Citrix Systems (CTXS) 24.3x*
- Starbucks (SBUX) 23.4x
- Expeditors Intl of Wash. (EXPD) 22.5x*
- F5 Networks (FFIV) 21.7x*
- Electronic Arts (ERTS) 21.2x
- Cognizant Technology (CTSH) 20.7x*
- Wynn Resorts (WYNN) 20.4x
- Illumina (ILMN) 20.2x *
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