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Why I Just Bought PayPal Stock

TheMotleyFool

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The conventional definition of a cheap stock is one with a low earnings multiple. For example, a stock trading for 10 times earnings is cheaper than a stock trading for 20 times earnings.

But as Bob Dylan sings, "The times, they are a changin'." The rising prominence of growth investing supports the idea that it might actually be better to buy a statistically more expensive stock (based on earnings multiple) if its earnings growth suggests that the company will be many times larger in the future. PayPal Holdings (NASDAQ: PYPL) today represents a good example of this theory.

Image source: Getty Images.

Source Fool.com

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