We like to buy low and sell high, but we prefer to buy when there is blood in the street and when fear is palpable. The current market is at a crossroads - whereas a month ago we suggested shorting the IWM and select overvalued names such as Baidu (BIDU) at $150, Youku.com (YOKU) at $60, Rediff.com (REDF) at $12, OpenTable (OPEN) at $95 and again at $110, Amazon.com (AMZN) at $200, etc., etc.
While our short plays have had their fair share of both wins and losses, I don't feel that a net short position is advisable right now, at least until we break below the 200 day moving averages. Because investors usually sell at the bottoms and buy at the tops, most people will likely be selling stocks if we move lower and will be buying stocks if we move higher. My personal feeling is that investors should hold some cash here and could consider a long/short portfolio given the fact that many stocks appear to be bid up in a speculative bubble while other names are completely unwanted and feared and therefore undervalued on price to cash flows or book value. Here are 15 stocks that look overvalued to us, and a quick run down of their valuations. Keep in mind, markets are oversold here and due for a bounce, but the bounce should be sold in these names in our view given their relative and absolute overvaluation.
PE P/B P/S PFCF Growth D/EQ Div. Intrin. val
|iShares Russell 2000 (IWM)||30||3||.65||21||10%||NA||1%||$50|
|PowerShares QQQ (QQQ)||23.7||3||NA||15||5%||NA||1%||$30|
|Simon Property (SPG)||42||7||8.2||20||10%||4X||2.7%||$70|
|Boston Properties (BXP)||98||3.2||9.23||-2.0||10%||2X||2%||$50|
|Red Hat (RHT)||77||6.3||9||80||25%||1.2X||0||$25|
|Green Mountain Coffee (GMCR)||100||11||6||NA||25%||99||0||$20|
Disclosure: I am short CRM, AMZN, NFLX, IWM, QQQ, LULU, SPG, BXP, DDS, LNKD, CMG, OPEN, GMCR.