Frothy Stocks Not Cappuccinos! | Greg Schnell, CMT | Market Buzz (01.27.21)

A few weeks ago, an article appeared talking about how frothy stocks were in the 2000’s when Sun Microsystems traded at 10 times revenue. What does that mean? It would take 10 years to get your money back at current annual revenues before the company pays for employees, real estate, cost of goods sold, taxes etc. At the time 10 x was expensive. This week’s Market Buzz covers off a twitter post listing current names trading at a 20x revenue level! Even more generous, the list was created as 20 x 2022 revenues not 2020 or 2021 revenues! These are frothy prices by any measure. Believe it or not, some of the charts look like another buy signal is setting up, but many of the names have warnings flags for Greg. It’s an entertaining edition of Market Buzz, looking at high EV/Revenue stocks!