11 Still Expensive High-Quality Tech Stocks
Despite the sector's pullback, these narrow- and wide-moat names look overvalued to us.
Parents know all too well that a teenager's mood can change on a dime. A careless comment from a buddy on Snapchat, four tests in one day, or not enough sleep/money/time can quickly turn even the best son or daughter into the stereotypical surly teen.
Like teenagers, technology stocks have proven that they, too, can turn on a dime: After dominating the broader market for some time, the Morningstar US Technology Index is down more than 13% during the past three months as of this writing. That's well below the broader market's 7% decline during that same period.
But not all tech stocks are cheap. In fact, 11 tech names with narrow or wide economic moats remain overvalued according to our metrics. Admittedly, these are generally fine, high-quality businesses; they're just not trading at appealing levels today.
The performance outlier during the past three months on the list, Xilinx (XLNX), has shot up more than 18%, thanks to solid fiscal second-quarter results and an optimistic outlook--a rarity among semiconductor stocks.
The other stocks on the list are in the red for the period, yet remain overvalued.
Susan Dziubinski does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.