United States Steel Corporation (X), Crown Castle International Corp. (CCI), Pioneer Natural Resources (PXD): The 5 Most Expensive Stocks in the S&P 500

The sector that Lam is in is highly competitive, and having a diverse client base is important. Lam counts Samsung as one of its major clients, which is great news right now, as Samsung is putting a pretty serious dent in Apple Inc. (NASDAQ:AAPL)‘s iPhone ambitions. But if the day comes where Samsung isn’t as hot, Lam needs to have a different customer that can pick up the slack.

For that reason, I’d say Lam might be slightly overvalued at today’s prices.

2. Pioneer Natural Resources (NYSE:PXD), P/E of 237
Pioneer Natural Resources (NYSE:PXD) is an independent oil and natural gas company that’s focusing on North America’s various shale plays. It’s important to understand two key variables that play an enormous role in whether Pioneer Natural Resources (NYSE:PXD) is worth your money.

The first is that companies like Pioneer Natural Resources (NYSE:PXD) do everything they can to make sure there’s oil or natural gas in the ground before buying or leasing land, but there’s no foolproof way to guarantee that it is all extractable.

The second variable is that even if the company does extract as much as it thinks it can, commodity prices for oil and natural gas have to be high enough to justify the investment.

Those are two big variables, but if they work out in the company’s favor, shares could trend still higher. Given the uncertain nature of the industry, I prefer to focus elsewhere.

1. Netflix, Inc. (NASDAQ:NFLX), P/E of 557
Finally, we have one of the most debated stocks out there. Netflix, Inc. (NASDAQ:NFLX) stock was absolutely slammed in late 2011, when the company botched its Qwikster spinoff, brashly raised prices without much explanation, and decided to forgo profits in an effort to expand globally.

But time seems to heal all wounds, and shareholders who bought in amid the turmoil have been rewarded. What does that mean for investors today? Well, the company has proved its moxie — winning over a global audience, and getting more original content out there. I won’t make any predictions on where this stock is headed, but I’ll just say investors need to be careful of the lofty expectations that are already baked into the stock’s price.

The article The 5 Most Expensive Stocks in the S&P 500 originally appeared on Fool.com and is written by Brian Stoffel.

Fool contributor Brian Stoffel owns shares of Apple. The Motley Fool recommends and owns shares of Apple and Netflix.

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