Valuations have been marching steadily higher in the technology sector over the past few years. Companies like Amazon and Netflix are now trading on triple-digit PE multiples, so where can the value-conscious investor turn? There are opportunities for those willing to look past the popular mega-caps, says Garry Laurence, Portfolio Manager at Perpetual Limited. However, these opportunities can be fleeting, and require constant vigilance.
“In tech, there are companies that we’ve watched for years. For example, Vipshop, which was trading on a PE of 50 times. It kept growing earnings at 20-30% p.a., and we managed to buy it last year on a PE of 12 times.”
Hear Garry’s full case for Vipshop and his thoughts on valuations in global technology stocks in the video below.
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