If we Americans can't count on tasty single-serving coffee and super-cheap rental movies -- and also on getting stupid-rich betting on the companies that sell these items -- what's the world coming to?
As one sees above in the 90-day price chart of Netflix
So, who's next? That, of course, could depend on which highflyer David Einhorn sinks his teeth into now that his bearish case has helped to bring Green Mountain down to earth. Or which company's management takes its cue from Netflix and unveils a radically new strategy certain to piss off its customers. And there are certainly other ways to let the air out of a gassy stock. A simple earnings miss. Aggressive accounting methods that become too obvious to ignore. So, it's worth looking at some still-levitating stocks. If they're in your portfolio, you might want to double-check the fundamentals, given the increasingly unforgiving nature of today's market.
Using the YCharts stock screener, we searched for companies with market caps of $2 billion or more and with PEs of over 50. We got 88 hits! Some have towering PEs because the E, for earnings, is presently low but likely headed up, and the market has priced, as in P, that cyclical move into the shares. We focused instead on four companies that are highly visible to consumers, given that direct and positive contact with a company -- think Apple
Chipotle Mexican Grill
Still, a P/E slightly over 50 as of this writing invites scrutiny, invites the shorts and invites current holders' anxiety. Chipotle appears to be a fabulously well-run company. Living up to the stock valuation may require more than that, however.