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Continued: Why UnitedHealth and five other stocks stand out in sizzling market

  • Article by: ALEX VEIGA , AP Business Writer
  • Last update: July 12, 2013 - 5:48 PM

— Amazon.com Inc.

Amazon's stock price is up about 23 percent this year and touched an all-time high of $307.55 in trading on Friday.

Sales for the world's biggest online retailer have been growing as Americans' confidence in the economy improves and they shift to online shopping. A key rival, Barnes & Noble Inc., is struggling with weaker sales and big losses driven by its Nook e-reader, a competitor to Amazon's Kindle.

Analysts see Amazon shares moving higher still. The average target price on the stock is $316.79.

Even so, some investment experts sense a bubble.

Brown has a "Sell" rating on the stock, which he believes is overpriced. He points to Amazon's "forward" price-earnings ratio, which compares a stock's price to projected earnings over the next 12 months. Not all agree. Amazon has an average analyst rating of "Overweight," which indicates the average broker rating falls between "Hold" and "Buy."

On that basis, Brown says investors buying Amazon's stock now are paying 100 times future earnings.

— Starbucks Corp.

Starbucks' stock is up 30 percent this year and reached an all-time high of $69.72 in trading on Friday. That's barely above the consensus target price of $69.62, according to FactSet.

The coffee chain, with more than 18,000 stores around the world, has delivered strong growth in the Americas and Asia, where it has opened more shops. Last year it introduced a single-serve coffee machine and branched out beyond coffee by acquiring tea shops and bakery chains, and a bottled juice company.

But it faces increased competition from fast-food chains such as McDonald's, which have expanded their coffee offerings. On average, the analyst rating on the stock falls between "Buy" and "Hold."

— MasterCard Inc.

The stock is up 22 percent this year and reached an all-time high of $602.74 in trading on Monday.

The credit and debit card company, which makes money from processing charge card transactions, thrives when consumers are in a spending mood.

MasterCard has been focusing on developing countries, where most transactions are still done in cash. As shoppers there shift from paper money to plastic, MasterCard can tap into that growth.

A consensus price target of $614.61 suggests that financial analysts see further growth ahead for the stock. But those surveyed by FactSet are split between "Buy" and "Hold."

— Visa Inc.

Visa's stock is up about 26 percent this year and reached an all-time high of $192.77 in trading on Monday. Visa remains the industry heavyweight. It has also taken steps to make its payment-processing business more accessible to mobile-device users.

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