4 stocks you'd love to buy but probably shouldn't

High P/E stocks can disappoint and be slammed by the market, but that doesn't mean I haven't got my eye on a few

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There are a number of high quality businesses listed on the ASX, amongst the average and a large pile of rubbish.

But trying to buy some of the best stocks at a cheap price is almost impossible – unless you are willing to wait for the next big market crash – which may be tomorrow or years away.

Investors could always jump in now – but that's highly risky, even for quality companies if they fail to live up to market expectations and their high prices.

Here are four stocks I've got my eye on that appear 'expensive', but I'd love to own at a cheaper price.

REA Group Limited (ASX: REA)

Shares in REA Group fell more than 10% in early August, after the real estate website owner disappointed investors – showing what can happen when a company delivers 30% annual growth in revenues and a 37% jump in net profit, but investors expected more. At the current price of around $45, REA sports a P/E ratio of 37x trailing earnings, and a 2015 financial year P/E ratio of just under 30x.

Reece Australia Limited (ASX: REH)

The plumbing and bathroom supplies retailer is valued at $3.3 billion and trades on a trailing P/E ratio of 26.7x. That's despite earnings only growing at 7% on average each year over the past ten years. A top quality business, with very little debt and majority owned and managed by the Wilson family, I'd love to own this business – but at much cheaper prices.

Domino's Pizza Enterprises Ltd (ASX: DMP)

The pizza retailer has seen its share rise by more than 1,000% over the past decade and at the current price of $25.15, trades on a trailing P/E ratio of 45x. 2015 financial year consensus forecasts have the company trading on a slightly better, but still very expensive 39.6x earnings.

Ramsay Health Care Limited (ASX: RHC)

With average annual earnings growth of 21% over the past decade, it's no wonder the private hospital operator is trading on a P/E of 29.8x. In the 2015 financial year, earnings are expected to grow by 21%, but Ramsay is still priced at 25.7x earnings.

Luckily, there's another stock that offers a cheap price, great dividends and strong growth in the years ahead…

Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga

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