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Why Commonwealth Bank of Australia shares are breaking records today

Shares in Commonwealth Bank of Australia (ASX: CBA) have once again broken through their all-time high to set a new record at $81.30 as shares rose 65c or 0.8%.

Although the stock’s momentum has certainly slowed over the last few months, it has still risen 4.5% since the beginning of the year, surpassing the returns of the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) in that time.

Although the banks all possess strong fundamentals, now is certainly not a good time to be buying. While one brokerage firm has set a target of $87.80 per share for Commonwealth Bank, the long-term outlook for the stock is hardly attractive at today’s price (it is difficult to see them climbing another 8% even in the short run).

Like its major rivals, namely National Australia Bank Ltd.  (ASX: NAB), Westpac Banking Corp (ASX: WBC) and Australia and New Zealand Banking Group (ASX: ANZ), Commonwealth Bank is trading on an excessive P/E ratio and price-book ratio, and stands little chance of delivering market-beating returns in the medium-to-long terms.

A much better bet than Commonwealth Bank

While it is now far too late to be buying the bank stocks, there are plenty of other opportunities to grasp.

The Motley Fool has issued a firm "BUY" rating on this small but ultra promising ASX company... and you can get the name and code FREE right now. Click here for your free copy of "The Motley Fool's Top Stock for 2014."

Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned.

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