Basic supply and demand economics apply with regards to the movement of stock prices. Stocks in favor tend to have higher demand and vice versa. Of course, when demand for any item is high, you always have to question whether or not the price is truly a fair price. In most cases, you can perish the thought that the price will be a bargain.

TUTORIAL: Stock Basics

Going With the Flow
Instead going against the tide, many investors prefer to swim along with it. While valuation always serves as an anchor with respect to investment decisions, investors may want to consider these timely stocks. In all cases, prices are not bargains but they are at nosebleed levels either. And as long as the economy or stock market doesn't suffer a significant shock, these names may be decent plays for those who want to invest with the in crowd. Home furnishings retailer Bed Bath and Beyond (Nasdaq:BBBY) continues to deliver even today. Both sales and profits are growing nicely. Shares at $52 are near a 52 week high but trade at a decent 17-times earnings.

Of the big oil majors, Chevron (NYSE:CVX) may actually be both timely and cheap. While profits are surging thanks to high oil, CVX stills makes good money when oil prices are lower. The shares trade at a single digit P/E and yield 3%.



MORE RELATED READING:



Feeding the World
Despite the surge in all things agricultural related and recent pullback in commodities, the long-term story for food remains robust. The world will need more and more grains to provide the food needs of the world, especially as people shift from a vegetable diet to a protein rich diet. As the largest producer of nitrogen fertilizer in the U.S., CF Industries (NYSE:CF) should continue do perform well over the long-run. Shares trade for a digestible 17-times earnings for a quality business in a fundamentally sound industry. ETF investors could choose the Market Vectors Agribusiness (NYSE:MOO) instead and gain exposure to a wider variety of agricultural related businesses. Investors should be aware that even though MOO trades for 14-times earnings, the current share price of $54 is well above the per share NAV of $47. This premium reflects the current bullishnesses that the ag industry is experiencing. (For more, see Food Price Inflation Still A Big Deal.)

The Bottom Line
Growth is a lever of value creation. And when companies are growing investors tend to pile in and that can create price distortions. Those who buy purely on momentum or timeliness may experience an unpleasant result. But absent nosebleed valuations, the best quality stocks could be worth a shot. (For more, see The Value Investor's Handbook.)

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Related Articles
  1. Personal Finance

    A Day in the Life of an Equity Research Analyst

    What does an equity research analyst do on an everyday basis?
  2. Mutual Funds & ETFs

    ETF Analysis: ProShares UltraPro Nasdaq Biotech

    Obtain information about an ETF offerings that provides leveraged exposure to the biotechnology industry, the ProShares UltraPro Nasdaq Biotech Fund.
  3. Mutual Funds & ETFs

    ETF Analysis: iShares MSCI Europe Financials

    Learn about the iShares MSCI Europe Financials fund, which invests in numerous European financial industries, such as banks, insurance and real estate.
  4. Mutual Funds & ETFs

    ETF Analysis: SPDR S&P Insurance

    Learn about the SPDR S&P Insurance exchange-traded fund, which follows the S&P Insurance Select Industry Index by investing in equities of U.S. insurers.
  5. Mutual Funds & ETFs

    ETF Analysis: SPDR S&P Emerging Markets Small Cap

    Learn about the SPDR S&P Emerging Markets Small Cap exchange-traded fund, which invests in small-cap firms traded at the emerging equity markets.
  6. Mutual Funds & ETFs

    ETF Analysis: ETFS Physical Platinum

    Learn about the physical platinum ETF. Platinum embarked on a bull market from 2001 to 2011, climbing to record prices along with other precious metals.
  7. Mutual Funds & ETFs

    ETF Analysis: iShares MSCI Turkey

    Learn about the iShares MSCI Turkey exchange-traded fund, which invests in a wide variety of companies' equities traded on Turkish exchanges.
  8. Mutual Funds & ETFs

    ETF Analysis: PowerShares S&P 500 Downside Hedged

    Find out about the PowerShares S&P 500 Downside Hedged ETF, and learn detailed information about characteristics, suitability and recommendations of it.
  9. Mutual Funds & ETFs

    ETF Analysis: Guggenheim Enhanced Short Dur

    Find out about the Guggenheim Enhanced Short Duration ETF, and learn detailed information about this fund that focuses on fixed-income securities.
  10. Mutual Funds & ETFs

    ETF Analysis: iShares US Oil&Gas Explor&Prodtn

    Learn about the iShares U.S. Oil & Gas Exploration & Production ETF, which provides an efficient way to invest in the exploration and production sector.
RELATED TERMS
  1. Equity

    The value of an asset less the value of all liabilities on that ...
  2. Exchange-Traded Fund (ETF)

    A security that tracks an index, a commodity or a basket of assets ...
  3. Profit Margin

    A category of ratios measuring profitability calculated as net ...
  4. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis ...
  5. Debt Ratio

    A financial ratio that measures the extent of a company’s or ...
  6. Price-Earnings Ratio - P/E Ratio

    The Price-to-Earnings Ratio or P/E ratio is a ratio for valuing ...
RELATED FAQS
  1. What is the formula for calculating compound annual growth rate (CAGR) in Excel?

    The compound annual growth rate, or CAGR for short, measures the return on an investment over a certain period of time. Below ... Read Full Answer >>
  2. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  3. When does the fixed charge coverage ratio suggest that a company should stop borrowing ...

    Since the fixed charge coverage ratio indicates the number of times a company is capable of making its fixed charge payments ... Read Full Answer >>
  4. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  5. What is the difference between the return on total assets and an interest rate?

    Return on total assets (ROTA) represents one of the profitability metrics. It is calculated by taking a company's earnings ... Read Full Answer >>
  6. What does a high turnover ratio signify for an investment fund?

    If an investment fund has a high turnover ratio, it indicates it replaces most or all of its holdings over a one-year period. ... Read Full Answer >>

You May Also Like

COMPANIES IN THIS ARTICLE
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!