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. Keeping that in mind, here are three high-flying stocks to hold for the long term.
Broadcom (AVGO)
Forward P/E Ratio: 30.6x
Originally the semiconductor division of Hewlett Packard, Broadcom (NASDAQ:AVGO) is a semiconductor conglomerate spanning wireless communications, networking, and data storage as well as infrastructure software focused on mainframes and cybersecurity.
Why Will AVGO Beat the Market?
Market share has increased this cycle as its 32.5% annual revenue growth over the last two years was exceptional
Offerings are mission-critical for businesses and lead to a best-in-class gross margin of 76.5%
AVGO is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
Broadcom is trading at $429.35 per share, or 30.6x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Alphabet (GOOGL)
Forward EV/EBITDA Ratio: 20.1x
Started by Stanford students Larry Page and Sergey Brin in a Menlo Park garage, Alphabet (NASDAQ:GOOGL) is the parent company of the eponymous Google Search engine, Google Cloud Platform, and YouTube.
Why Do We Love GOOGL?
Alphabet’s dominant Google Search sits on the pantheon of the best businesses ever. This is reflected in its robust long-term revenue growth and elite operating margin.
The company’s profit margins have become even higher over time, speaking to its scale advantages and operating efficiency not only in its core Search business but also in Google Cloud Platform and YouTube.
Revenue growth and increasing operating margins are the key ingredients for strong EPS growth. Google has these, and when also factoring in its share repurchases, you can see why EPS has exploded over the long term.
Alphabet’s stock price of $399.55 implies a valuation ratio of 31.7x forward price-to-earnings. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Monster (MNST)
Forward P/E Ratio: 32.6x
Founded in 2002 as a natural soda and juice company, Monster Beverage (NASDAQ:MNST) is a pioneer of the energy drink category, and its Monster Energy brand targets a young, active demographic.
