It's hard to watch shares you were considering buying go gangbusters before you had a chance to buy them.
If I had a time machine, I'd definitely go back and buy these three shares:
A2 Milk Company Ltd (Australia) (ASX: A2M)
A2 Milk has truly beaten all expectations and it could have many years of growth ahead thanks to its expansion in overseas markets.
Supermarket shelves are always sold out of its formula, which just shows how much demand there is, even with increased production.
The business has grown profit strongly, but I think the share price has gotten too far ahead of itself. It's currently trading at 38x FY18's estimated earnings, which is a mighty price.
If A2 Milk were to lose some of its froth then I'd definitely be interested in adding to my portfolio.
REA Group Limited (ASX: REA)
The global property site owner has smashed it out of the park for investors who invested early on.
Digital advertising can't be underestimated. Owning the biggest property site in Australia can't be underestimated either. This power allows REA Group to implement strong price hikes every few years.
It's currently trading at 35x FY18's estimated earnings, which is expensive for a business that is only growing at low double digits. If the business fell back to the low $50s then I'd be very interested.
Xero FPO NZX (ASX: XRO)
This cloud accounting giant is taking the western world by storm. It has dominated New Zealand, it's now the leader in Australia and the UK market looks very exciting.
It's hard to believe the share price has grown from $17 to $30 this year, but it has. In hindsight it would be have been a great investment back in February.
There are many more businesses that Xero can add as subscribers, as well as more features, which is why I think it has a lot more growth to come.
Foolish takeaway
I really like all three companies, but the valuations are just too eye-popping for me. Particularly when there are shares like Bapcor Ltd (ASX: BAP) which is trading at 24x FY17's earnings and just confirmed net profit after tax growth should be around 30% for FY18.
