If it’s true that the apple doesn’t fall far from the tree, then large-company growth stocks could bear fruit for a long time to come. Consider Apple, the nation’s quintessential growth stock. It has been a torrid performer, climbing 87% over the past year, and it is now the world’s largest company in terms of stock market capitalization.
Apple’s ascent has helped boost Standard & Poor’s 500-stock index, the proxy for large-company stocks. Over the past 12 months through April 5, the index returned 7.3%. By contrast, the small-company Russell 2000 index fell 2.7%. Yet big-capitalization stocks still appear to be attractively priced. The average price-earnings ratio for the S&P 500 is 13, based on estimated 2012 profits, compared with a P/E of 20 for the Russell 2000.
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