Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
Nvidia (NVDA) has been a stellar performer over the past 5 years with 1000%+ return. While a growth stock which has benefited from low rates tailwind its EPS growth continues to impress. It seems to be one MM have not had a view on for inclusion in International portfolio. Having pulled back approx 20% in past few weeks in line with overall Nasdaq pullback interested to hear MM view on stock at this price?
Nvidia (NVDA) is a great company and one we’ve looked at (but not written about) often. In the market there are two main things that drive share prices: 1. The earnings of a company and 2. the multiple the market is prepared to pay for those earnings. As interest rates rise, multiples tend to contract. In the case of NVDA, it’s trading on 27x sales and around 60x earnings, that’s not to say we would not buy a company with those metrics that is growing strongly however we would only have one of two of those sorts of companies in the portfolio at any one time and to date we’ve backed The Trade Desk (TTD US) which is trading on around 30x sales but we think will grow at a stronger rate.
Technically, NVDA looks a buy around current prices (US$260) however we are not adding more technology into the portfolio at this stage.
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