It’s been a cracking start to the new financial year (FY) with the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) jumping 1.77% in the first three days of trade, if it keeps this up……..well… it won’t!
Sorry to be a spoil sport but there’s no way the market will keep rising this FY at the rate it has over the past few days and what’s more these first few days ultimately provide us with no insights as to what the rest of the year has in store.
Rather than trying to predict the direction of the market, at the end of the day investors are best off buying themselves shares in businesses that they think have favourable long-term prospects and importantly they should buy those shares at a reasonable price.
The following four companies are literally some of the very best businesses available on the ASX, however at current prices they are arguably best avoided, with investors better off watching and waiting for a more appealing price-to-value opportunity to buy in.
Despite Navitas Limited’s (ASX: NVT) share price dropping 1.7% yesterday the stock which offers shareholders exposure to the fast-growing education industry is still priced at nose bleed levels.
Commonwealth Bank of Australia (ASX: CBA) may be the best quality and most defensive bank available on the ASX, but at today’s prices it also looks to be the most expensive.
Tabcorp Holdings Limited (ASX: TAH) is a very defensive company, but it also doesn’t appear to have many options to significantly growth its earnings. As a slow grower its current pricing looks stretched.
Domino’s Pizza Enterprises Ltd. (ASX: DMP) continues to grow and expand its international operations at a rapid rate, but the question for investors is whether that growth rate justifies the supercharged price? The stock is appealing but it could be best to just keep it on a watchlist for the time being.
Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.
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