As investors, we are always looking for that next big winner in order to guide out portfolios higher.
Stocks that are hitting 52-week highs can be a warning of impending losses in the case of those stocks that have simply gotten ahead of themselves or confirmation of a good decision that is going just as planned.
Here I will look at two stocks that are hitting new 52-week highs in order to reassess where they will go from here.
Parkland Fuel Corp. (TSX: PKI)
With a five-year return of 145% and a one-year return of 111%, investors may be wondering if they’re simply too late to get into Parkland Fuel stock.
Fair question.
But I am here to tell you why you aren’t too late — and why this stock has plenty more upside from here.
Parkland is a $5.9 billion convenience store operator and fuel marketer that has aggressively grown organically and through acquisitions, driving a 312% total shareholder return in the last eight years.
Being involved in the supply and refining of fuel as well as the retail and commercial convenience locations gives Parkland an advantage. It is not concerned with the absolute price of oil, only in the spread between its supply/refining business and pump prices.
The company’s latest acquisition of the largest independent fuel marketer in the Caribbean is testament to Parkland’s expertise and striving for growth to the benefit of shareholders.
This acquisition will add approximately $0.50 in cash flow per share right away, plus a further $0.23 per share from synergies.
Parkland has a leading market position, and its scale and buying power give it a real and significant competitive advantage now and well into the future.
MTY Group Inc. (TSX: MTY)
MTY Group stock has increased 107% in the last five years and 39% in the last year as the company has expanded to approximately 5,500 locations of its quick-service restaurants such as Extreme Pita, Mucho Burrito, Manchu Wok, and Thai Express.
The company’s continued acquisitions of new restaurant chains has driven an almost 200% increase in revenue in the last five years, to $276 million in 2017, and a more than 200% increase in cash flows, driving increasing returns while maintaining a healthy balance sheet.
In fact, in the last 15 or so years, MTY has acquired and integrated more than 60 brands, doing so successfully and maintaining a healthy balance sheet and stock price, which has grown at a compound annual growth rate of 25%.
In a time when we are all eating out more than ever amidst increasingly busy schedules and increasing wealth, this company is poised to continue to do well.
