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Apple may be hitting new all-time highs and trading with a forward P/E of "just" 11.6, making it a value stock, but many other hot Internet and technology stocks don't look quite so cheap. Just the opposite. Many are trading at nosebleed levels.
Yet the justification has always been that you're paying for growth and that growth doesn't come cheaply. After all, investors must pay a premium to buy into the hottest technologies.
As the 2012 stock rally advances, however, many of these stocks have also seen big gains and that has pushed their P/E ratios even higher.
Take a look at the forward P/Es of some of the glamour companies and their expected growth rates:
2. LinkedIn (LNKD)
P/E of 356
EPS growth: 89.2%
Has irrational exuberance again gripped some segments of the technology sector?
Will investors get burned?
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