Less than six months ago the $15.5 billion blue-chip insurer and financial services company AMP Limited (ASX: AMP) looked a very appealing investment opportunity. Its share price had dropped to nearly $4, which represented a decade low level that had only been exceeded during the GFC and during a period from mid-2011 to mid-2012.
Fast forward six months to today and AMP's share price is trading near its 52-week high at a price of $5.33. Those recent gains represent a share price surge of 20% and compare very favourably with the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO), which is up less than 2%.
As a result of those gains, AMP is now trading on a forward price-to-earnings (PE) multiple of 16. While that's not excessive and is lower than some of its peers such as Suncorp Group Ltd (ASX: SUN), it is high enough that outperformance from this point looks less promising.
A better opportunity
Given the very full pricing of many large and small-cap stocks there is a very real risk of overpaying in the current market, but despite the lack of value on display there are still opportunities. One stock which could be worthy of a closer look by investors is stockmarket operator ASX Ltd (ASX: ASX). The near-monopoly provider of equity and futures exchange services is trading on a forward PE of 18.2 and with a forecast fully franked dividend yield of 5%. Given the long-term growth potential and entrenched market position of the ASX, these investment metrics look mighty appealing.