Will Bear Stearns Ever Hibernate?

Bear Stearns had more good news this morning. Earnings were up again, with profits rising 81%. And, based on its run up in the pre-market, it will not be plagued by the same doubts that hurt Lehman Brothers when it announced good results recently, or Goldman Brothers, which seemed to suffer from the same doubts on Wall Street.

But, Bear Stearns my have run a bit too far.

Total revenue rose 33.4% over last year's quarter and 14.4% over the immediately previous quarter, to $2.5 billion. Most of the rise was fueled by improvements in fixed income and the institutional equities businesses, which were both up over 40%. Pretax income rose to $834 million.

With pre-market gains, the stock is now near $130 on a 52-week high/low of $147.77/$98.50. But, the company's price to sales ratio is 2.33. Lehman's is 2.13. And, Goldman Sachs, which one would think would carry a premium, is at 2.05. Merrill Lynch is at 2.18.

All of this may be an indicator that, trading near its high, Bear Stearns may not have much further to rise. It is a great company, but it could be difficult to hold a valuation above its competitors.

Douglas A. McIntyre can be reached at douglasamcintyre@gmail.com. He does not own securities in companies he writes about.