Are These 7 Stocks In Danger of a Decline?

The following seven stocks have recently hit 52-week highs.  Are any of them in danger of falling from their height?

Let’s take a look at each in turn.

  1. Amazon.com (NASDAQ:AMZN):  The stock most recently traded at $198.21, just off its 52-week high of $203.42.  Its forward price-to-earnings ratio is 51.62, its 5-year expected price-to-earnings growth ratio is 2.94, its price-to-sales is 2.45, and its price-to-book ratio is 12.3.  While the company is solidly profitable and in no danger of not being able to meet its short-term obligations (its current ratio is 1.46), its stock nonetheless looks rather pricey and due for a fall at some point.  About the company: Amazon.com, Inc. is an online retailer that offers a wide range of products. The Company’s products include books, music, videotapes, computers, electronics, home and garden, and numerous other products.  Amazon offers personalized shopping services, Web-based credit card payment, and direct shipping to customers.
  2. Simon Property Group (NYSE:SPG):  The stock most recently traded at $114.97, slightly off its 52-week high of $117.21.  Its forward price-to-earnings ratio is 16.21, its 5-year expected price-to-earnings growth ratio is 2.89, its price-to-sales ratio is 8.67, and its price-to-book ratio is 7.08.  The company’s current ratio is slightly worrying, at 1.14, but the company is profitable.  Its shares look rather pricey at current levels. About the company: Simon Property Group, Inc. is a self-administered and self-managed, real estate investment trust. The Company owns, develops, and manages retail real estate properties including regional malls, outlet centers, community/lifestyle centers, and international properties.
  3. Redhat (NYSE:RHT):  The stock most recently traded at $46.60, off slightly from its 52-week high of $49.  Its forward price-to-earnings ratio is 41.31, its 5-year expected price to earnings growth ratio is 2.44, its price-to-sales ratio is 9.73, and its price-to-book ratio is 6.85.  Its current ratio is a comfortable 1.74, so the company has no problem meeting its short-term obligations.  About the company: Red Hat, Inc. develops and provides open source software and services, including the Red Hat Linux operating system.  The Company’s Web site offer information and news about open source software and provides an online community of open source software users and developers.
  4. SINA Corporation (NASDAQ:SINA):  Its shares have pulled back somewhat from its 52-week high, most recently trading at $122.67.  Its 52-week high is $147.12.  Its forward price-to-earnings ratio is 53.4, its 5-year expected price-to-earnings growth ratio is 3.97, its price-to-sales ratio is 18.18, and its price-to-book ratio is 5.91.  About the company: SINA Corporation is a global Internet media company operating Chinese-language destination sites.  The Company offers a network of branded content and services targeting people of Chinese descent worldwide.  SINA.com offers online news, entertainment, community and commerce through web sties that are produced and updated by local teams in China, Hong Kong, Taiwan, and North America.
  5. Lululemon Athletica, Inc. (NASDAQ:LULU):  The shares have most recently traded at $93.59, down about $10 from its 52-week high of $102.83.  Its forward price-to-earnings ratio is 36.97, its 5-year expected price-to-earnings growth ratio is 1.93, its price-to-sales ratio is 9.34, and its price-to-book ratio is 17.  The company is solidly profitable, has no outstanding debt, and with a current ratio of 4.56, it can comfortably pay its short-term obligations.  Its shares, however, trade at a very high multiple.  About the company: Lululemon Athletica Inc. designs and retails athletic clothing.  The Company produces fitness pants, shorts, tops and jackets for yoga, dance, running, and general fitness.
  6. Yuoku.com Inc. (NYSE:YOKU):  The company’s shares are trading at $56.36, about $13 off their 52-week high of $69.95.  About the company: Youku.com Inc. is an Internet television company.  The company is not profitable; therefore, it has no price-to-earnings ratio.  It is selling at 98 times its sales per share, and 20 times book value per share.  On a bright note, its current ratio is a very high 7.87.  Nonetheless, a profitless company that trades at significant multiples of sales and book value looks due for a pullback at some point.  The Company’s Internet television platform enables consumers to search, view and share video content quickly and easily across multiple devices in the People’s Republic of China.
  7. PowerShares QQQ Trust, Series 1 (NASDAQ:QQQ):  As this is an ETF, and not a conventional company, it needs to be analyzed somewhat differently than the above stocks.  It recently traded at $58.26, slightly off its 52-week high of $59.34.  The ETF has $24 billion in net assets, a trailing price-to-earnings ratio of 17, and a dividend yield of $0.67.  The questions that investors must ask themselves, of course, is: what are the prospects of the shares in the NASDAQ 100?  Some of these shares, such as Apple (NASDAQ:AAPL), appear to be undervalued by the market (Apple’s price-to-earnings growth ratio is, believe it or not, less than 1), but other companies in the NASDAQ 100 have PEG’s above 1, such as Cisco Systems, Inc. (NASDAQ:CSCO) (1.07) and Dell, Inc. (NASDAQ:DELL) (2.02).   About the fund: PowerShares QQQ is an exchange-traded fund incorporated in the USA.  The Fund represents undivided ownership interests in the PowerShares QQQ.  The Fund’s objective is to provide investment results that generally correspond to the price and yield performance of the component securities of the NASDAQ 100 Index.

Advantage: Check out our interactive stock charts, fundamentals, Twitter stream, and more >>

Spring Ahead May 2011 with Our Flagship Newsletter and Winning Stock Ideas>>