Expensive stocks typically earn their valuations through superior growth rates that other companies simply can’t match. The flip side though is that these lofty expectations make them particularly susceptible to drawdowns when market sentiment shifts.
Finding the right balance between price and quality can challenge even the most skilled investors. Luckily for you, we started StockStory to help you identify the real opportunities. That said, here are three high-flying stocks to hold for the long term.
Forward P/E Ratio: 48.3x
Founded in 1997 by its longtime CEO Michael Hsing, Monolithic Power Systems (NASDAQ:MPWR) is an analog and mixed signal chipmaker that specializes in power management chips meant to minimize total energy consumption.
Why Is MPWR a Top Pick?
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Annual revenue growth of 27.9% over the last five years was superb and indicates its market share increased during this cycle
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Earnings per share grew by 29.1% annually over the last five years, massively outpacing its peers
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Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures
Monolithic Power Systems’s stock price of $961 implies a valuation ratio of 48.3x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free for active Edge members.
Forward P/E Ratio: 30.3x
Initially based on a strategy of buying excess inventory from manufacturers or other retailers, TJX (NYSE:TJX) is an off-price retailer that sells brand-name apparel and other goods at prices much lower than department stores.
Why Will TJX Beat the Market?
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Same-store sales growth averaged 4.1% over the past two years, showing it’s bringing new and repeat shoppers into its stores
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Enormous revenue base of $57.93 billion compensates for its low gross margin and provides significant leverage in supplier negotiations
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ROIC punches in at 27.9%, illustrating management’s expertise in identifying profitable investments, and its rising returns show it’s making even more lucrative bets
TJX is trading at $144.74 per share, or 30.3x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
Forward P/E Ratio: 80x
Owner of Ticketmaster and operator of music festival EDC, Live Nation (NYSE:LYV) is a company specializing in live event promotion, venue management, and ticketing services for concerts and shows.
Why Does LYV Catch Our Eye?
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Impressive 40.3% annual revenue growth over the last five years indicates it’s winning market share
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ROIC punches in at 32.7%, illustrating management’s expertise in identifying profitable investments, and its returns are growing as it capitalizes on even better market opportunities
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Rising returns on capital show management is finding more attractive investment opportunities
