Share prices can be deceiving. You'd be surprised how many investors judge stocks by their share price alone. It's a mistake to assume that a stock trading for $2 a share is cheap, while another trading for $200 a share is expensive. In order to avoid anchoring to a specific price, we should evaluate each company from a variety of angles.
Moreover, just because a stock hits a new all-time high doesn't mean it is overvalued. I took a look at some stocks that recently hit 52-week highs that I think still have room to run.
Shares of priceline.com
A strong international presence (particularly in Europe) has fueled much of the company's growth. More than 80% of Priceline's operating income is generated outside the U.S., but there is still plenty of room left to run in emerging markets such as Asia and Latin America.
Priceline continues to show strong growth trends, leaving competitors in the dust. I think the company can sustain its growth in the years ahead, which is why I'm giving it a three-year outperform rating on my profile in Motley Fool CAPS.
Shares of Starbucks
What the company is doing in Asia is nothing short of remarkable. Starbucks currently operates more than 500 coffee shops in mainland China, and the brand has had so much success in the region that management plans to triple its workforce in the country by 2015.
Another huge advantage for the Seattle-based brewer is its multiple revenue streams. Smart acquisitions have helped Starbucks move into new product categories, including its recent foray into the $3.4 billion juice market.
Meanwhile, Starbucks unveiled its Verismo single-cup coffeemaker last month, going head-to-head against Green Mountain Coffee Roasters
From a product level to the in-store experience, execution this good doesn't happen without exceptional leadership. As long as Starbucks CEO Howard Schultz is at the helm, I'm confident the stock will continue to post record performance.
I expect both Priceline and Starbucks to continue to go up from here, despite their seemingly expensive share prices. Don't sell yourself short by ignoring the obvious growth signs. Let Apple be a lesson for all: Profits are more important than price. Learn more about choosing the right stocks for your portfolio in a special report from The Motley Fool. Click here to get the free report now and you'll discover "3 Stocks That Will Help You Retire Rich."
Foolish contributor Tamara Rutter owns shares of Apple. Follow her on Twitter, where she uses the handle: @TamaraRutter, for more Foolish insights and investing advice. The Motley Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of Starbucks, Apple, Green Mountain Coffee Roasters, and priceline.com, as well as creating a lurking gator position in Green Mountain, a bull call spread position in Apple, and writing covered calls on Starbucks.
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