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CSL bounces higher

Blood plasma and vaccine manufacturer CSL (ASX: CSL) looks like it will close out the week with five straight days of gains. After touching an all-time high of $64.70 in May, CSL got caught in the ensuing stock market sell-off which has seen the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) lose around 8%. However over the past four trading sessions investors appeared to have rediscovered their love for CSL sending the share price up over 6% to $61.55.

There is no doubt that CSL is a wonderful company with a superb suite of products. Trading on a forward price-to-earnings multiple over 20 though, the share price does reflect this quality and growth potential. For investors buying in at current lofty prices, the prospects of further growth in the share price may be substantially reduced.

Foolish takeaway

Short-term gyrations in prices can offer up attractive buying opportunities, however investors are best off avoiding the time-zapping pastime of following the moves in share prices too closely. That time can be much better spent discovering companies like CSL, Cochlear (ASX: COH) and Sirtex Medical (ASX: SRX), which over the past five years have seen their earnings grow and their share prices increase 73%, 29% and a staggering 246% respectively.

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Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.

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