The US is home to most of the world’s biggest and richest public companies. I’ve been checking today’s most popular stocks, trying to find the best US shares to buy now. Would any of these make my list?
Just about everyone seems to be tipping Apple at the moment. Well, not just now. It’s been like that for years. I remember the first time I decided that Apple shares were overvalued and didn’t buy. It was about 25 years ago, and we know what’s happened since.
Yes, Apple was definitely one of the best US shares to buy back then. But is it now? On a trailing P/E of 29, it really doesn’t look overvalued to me. But tech shares like Apple seem to perpetually hinge on the next quarter’s results, and they could go in either direction in 2021.
Perhaps unsurprisingly, Tesla is popular with buyers of US stocks at the moment. It’s been in the news again of late, due to Elon Musk apparently switching views on Bitcoin. But would I buy Tesla shares today? The future of road travel looks certain to be electric, and Tesla’s technology is leading the way.
But the valuation of the shares makes my eyes water. Tesla’s are on a trailing P/E of 600. I just couldn’t count anything valued at 600 times its earnings among the best US shares. And yes, I know, I might be making another Apple for myself.
Electric vehicles too
While electric vehicles are big news, NIO shares have been soaring. But it’s been a bit of a strange ride. By mid-January, investors in the producer were sitting on a gain of around 1,200% over 12 months. But, since then, Nio has dropped 42%. My Motley Fool colleague Zaven Boyrazian has probed the reasons behind the price dip. As he points out, it’s hard to justify the current NIO share price based on any fundamentals.
With a price-to-sales ratio of 22, and a market-cap that’s now soared to $58bn, is it one of today’s best US shares? I think it’s a company with great sales prospects. But on that valuation, it’s not for me at present.
Still one of the best US shares?
It might not exactly be a new idea, but Amazon is still one of America’s favourite stocks. Covid-19 gave the share price a big boost, pushing it up around 70% since the pandemic started. And now we’re heading out of lockdowns, there’s been no sign of any fall back. Will I buy Amazon shares? Maybe I just don’t get US stock valuations, but no, not on a P/E of 60, I won’t.
How about Beyond Meat? With greenhouse gases and bovine flatulence big news, this is another stock investors have been shovelling up. How’s its valuation? There are no profits, so no P/E, and it’s a bit tricky to work out. But I do like Beyond Meat, and I do think it might be among the best US shares out there right now. It’s got to be risky, mind.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Amazon, Apple, Beyond Meat, Inc., NIO Inc., and Tesla and recommends the following options: long January 2022 $1920 calls on Amazon, short March 2023 $130 calls on Apple, short January 2022 $1940 calls on Amazon, and long March 2023 $120 calls on Apple. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.