When evaluating stocks, I prioritize affordability over short-term performance. I’m more likely to take calculated risks on undervalued companies that can offer long-term growth potential. Warren Buffett’s investment mantra echoes my approach: “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”
However, there are exceptional stocks that warrant premium prices despite their rising valuations. These growth stories have proven track records and are poised for continued success. Netflix (NFLX), IBM (IBM), and Brinker International (EAT) fit this description.
Netflix has seen remarkable growth, with shares increasing 92% in the past year. Although the stock trades at 61 times earnings, its long-term growth prospects remain substantial. Investing $1,000 in Netflix stock at the start of 2016 would be worth $11,350 today, a testament to its enduring potential.
IBM has undergone significant transformations under new leadership and is now reaping benefits from its focus on cloud computing, consulting services, and artificial intelligence. The company’s generative AI orders have soared, with sales reaching $6 billion in Q1 2023. IBM’s stock is relatively affordable at 21 times free cash flow.
Brinker International has also experienced a successful turnaround under new CEO Kevin Hochman. The company has refocused its marketing efforts and simplified its menu, leading to improved customer traffic. Brinker’s shares have more than doubled in one year, making them an attractive option with a valuation of 21 times free cash flow.
These exceptional stocks may not be for every investor, but they demonstrate the potential for long-term success despite premium prices. As always, it’s essential to conduct thorough research and evaluate individual stock performance before making any investment decisions.
Source: https://www.fool.com/investing/2025/07/05/3-soaring-stocks-id-buy-now-with-no-hesitation