We're already a week into December, Christmas is fast approaching. It's around this time of year that kids are writing their Christmas wish lists.
Christmas is a time of giving, particularly to kids who mostly have sky-high demands for presents that are far too expensive for their pocket money to buy.
So, in a similar vein, if I could ask Santa to buy some very expensive shares for me, these are the ones I'd pick:
a2 Milk Company Ltd (Australia) (ASX: A2M)
a2 Milk has been one of the best performing mid-cap stocks on the ASX over the last two years, growing from $1 to today's $7.17.
A lot of this growth is justified, the business grew net profit after tax by 198% in FY17, which was on top of several years of good growth.
However, the reason why I'd ask Santa to buy a2 shares for me is because I think the share price has grown too far for me to stomach a buy with my own money. It's currently trading at 34x FY18's estimated earnings. a2 is one that keeps 'getting away', perhaps I'll rue not buying at today's price.
REA Group Limited (ASX: REA)
The real estate website business has been a wonderful business for shareholders over the past decade. The share price has grown from $7.18 to $77.20 over the last 10 years.
The business' ability to extract as much advertising revenue as it does from property vendors is very impressive. I think realestate.com.au is only going to become more important for vendors to use. Therefore, REA Group will be able to charge more, particularly for its premium listings.
I like that REA Group also has promising investments in property businesses in North America and Asia, these could drive future growth.
I don't think the current REA Group share price is too excessive for its potential growth, but there's a good chance that the market may become negative about REA Group if our property market takes a dive, even if REA Group's earnings keep growing.
REA Group is currently trading at 37x FY18's estimated earnings, I'd rather Santa give me shares than commit capital at this point in time.
Costa Group Holdings Ltd (ASX: CGC)
Costa grows different types of food including berries, mushrooms, citrus fruit, tomatoes and avocados. It's also done a great job of growing its share price by 93% over the last year.
Costa is predicting net profit after tax (excluding material items and Self-Generating and Regenerating Assets) growth to be 20% over the coming year. It's hard to say if the current price/earnings ratio is justified because it will depend on if the business can deliver on impressive growth in further years.
I wish I'd bought Costa shares a year ago, sadly I didn't.
Foolish takeaway
As much as I wish Santa could help me, I don't think he's able to.
