The Motley Fool

3 Stocks at 52-Week Highs: Should You Take Profits or Keep Stacking?

The S&P/TSX Composite Index rose 12 points on May 31, but is likely to face volatility in the coming days after a shocking announcement from the White House. Canadian leadership hoped to avoid the impact of U.S. steel and aluminum tariffs with a deft diplomatic touch, but that strategy appeared to fail after the Trump administration announced that it was cancelling the exemptions. Prime Minister Justin Trudeau lashed out and called the tariffs “totally unacceptable,” expressing his frustrations in discussions with President Trump and Vice President Mike Pence.

The move will add even more pressure to contentious NAFTA talks. On the subject of a deal, Trump said, “The United States will agree to a fair deal or there will be no deal at all.” This marks a new low in the relationship between the two governments, and may well concern some investors.

Today we’ll look at three stocks that have reached 52-week highs in the last few weeks. Should investors remain on the sidelines as geopolitical turmoil grips the North American continent?

Bombardier Inc. (TSX:BBD.B)

The optimism surrounding Bombardier has been hard to ignore over the past few months. The company scored a key victory in a trade spat with the United States, solidified a major partnership with Airbus SE, and has managed to make good on the first stages of its turnaround plan.

The stock reached a 52-week high of $4.97 in morning trading on May 31. Bombardier has reached its most favourable position in years, but with trade tensions heating up, it may be wise for investors to wait for an entry point.

Zymeworks Inc. (TSX:ZYME)(NYSE:ZYME)

Zymeworks also reached a 52-week high on the morning of May 31. The Vancouver-based biopharmaceutical company has seen its stock soar in 2018. Shares are up a stunning 190% this year so far, and have increased 70% from the same period last year.

This surge stems from the enthusiasm surrounding ZW25, its lead product candidate. ZW25 is an antibody designed to target gastric, ovarian, and breast cancer tumours. The drug is currently in phase one of clinical trials and has yielded positive results thus far. Two reports have projected that the value of the breast cancer treatment market could be valued anywhere from $19 billion to $28 billion by the mid-2020s.

Zymeworks should be relatively unaffected by trade concerns, and its enormous potential warrants excitement. Of course, it’s early days still for ZW25, so investors should be cautious.

Brookfield Business Partners LP (TSX:BBU.UN)(NYSE:BBU)

Brookfield Business Partners hit a 52-week high of $53.70 in morning trading on May 28. Shares are up 20.4% in 2018 so far. In the first quarter of 2018, Brookfield posted net income of $74 million over $66 million in Q1 2017, and funds from operations (FFO) grew to $138 million compared to $95 million in the prior year. The stock offers a quarterly dividend of $0.0625 per share, representing a modest 0.6% dividend yield.

Brookfield Business Partners posted growth across the board, and the stock has been robust even in the midst of volatility in previous years. This stock is worth a hold even in the current climate.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool owns shares of BROOKFIELD BUSINESS PARTNERS LP.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.