With a current market cap of $27.5 billion, Salesforce.com trades at nine times sales and more than 51 times tangible book value. I admit that as a value investor, I seldom understand the way that the market prices growth names such as Salesforce.com. But I do understand that especially in technology, competitive forces are always finding ways to drive down costs, and to offer better products and services. CRM Price / Sales Ratio TTM data by YCharts CRM Price / Tangible Book Value data by YCharts Back in my Bloomberg days, several years ago, I noticed a consultant wearing something around his neck. It was a thumb drive, and the first I'd ever seen. As I recall, this amazing device could store 1GB of data, and cost in the neighborhood of $200. Now, you can buy one that stores 16GB for less than $10.
I admit it; I don't understand why investors are willing to pay so much for companies like Salesforce.com, which is now trading at all-time highs. What am I missing? At the time of publication the author held no positions in any of the stocks mentioned.Follow @JonMHellerCFAThis article is commentary by an independent contributor, separate from TheStreet's regular news coverage.