Another week of predominantly bullish economic data has driven the overall market higher. For bulls, this may seem like a dream come true, but for a skeptic like me, I use these never-ending rallies as motivation to evaluate companies trading near their 52-week highs to see if they really deserve their current valuations.
Keep in mind that some companies deserve to be trading at 52-week highs. ARM Holdings
Can you hear me now?
Yes, I'm ready to take your best jabs by recommending that you let Verizon
There's something just not very enticing about 2% estimated revenue growth coupled with $53 billion in total debt. I feel you'd be better off not answering Verizon's call at these levels.
Valuation in the clouds
Cloud-computing play F5 Networks
I think it's important to understand that just because a company is involved in cloud computing, it doesn't necessarily deserve a forward price-to-earnings multiple of 33 or a price-to-book ratio of 11. I don't think F5 can stay in high gear much longer.
Ring the register
It's unreasonable to think that these two companies are catering to the same group of consumers, but they do share a common theme in that they must find ways to pass along increasing food costs to customers. I'm a bit leery about believing Whole Foods when it claims consumers have been willing to step up their discretionary spending when both SUPERVALU and Family Dollar have shown us otherwise. Whole Foods could just be that darn good, but with organic competition increasing, I'm not sold on it.
Have an opinion on any of the above companies? Let's hear about it in the comments section below!
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Fool contributor Sean Williams does not own shares in any companies mentioned in this article. He likes his iPhone so much he's considered giving it a name. You can follow him on CAPS under the screen name TMFUltraLong. Whole Foods Market and Apple are Motley Fool Stock Advisor picks. Microsoft is a Motley Fool Inside Value pick. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool owns shares of Apple, Microsoft, and SUPERVALU. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.