Hey there, Fools. I’m back to highlight three stocks that soared last week. Why do I this? Because when a stock leaps over a short period of time, it usually means one of two things:
- The stock will keep soaring as momentum-oriented investors hop on for the ride; or
- The stock will pull back sharply, or “correct,” as value-conscious folks take profits off the table.
While you should never put too much weight on price action, it makes a tonne of sense to revisit your investment thesis after big moves.
Without further ado, let’s take a look at last week’s big winners.
Leading things off is MAG Silver (TSX:MAG)(NYSE:MAG), which spiked about 9% last week. Year to date, shares of the silver miner remain off 37% versus a loss of 14% for the S&P/TSX Capped Materials Index.
2018 hasn’t been kind to MAG shareholders, but there’s light at the year-end tunnel. In its quarterly results Tuesday, management said it has now realized 5,159 metres of underground development for the year — or 32% of the total development advanced at its key Juanicipio project. Moreover, MAG ended Q3 with $141.8 million in cash and no debt.
The stock is more than two times as volatile as the market. But if you’re willing to stomach the swings, MAG’s development momentum might be worth riding.
Next up, we have Canada Goose (TSX:GOOS)(NYSE:GOOS), whose shares surged as much as 21% last Wednesday. Shares of the outdoor apparel company are up a whopping 132% year to date, while the S&P/TSX Capped Consumer Discretionary Index is down 12% over the same time period.
Fueling last week’s pop was another blowout quarter. In Q3, EPS of $0.45 crushed expectations by $0.23 as revenue surged 34% to $230.3 million. The gross margin also expanded 520 basis points to 55.8%. Looking ahead, management now sees full-year 2019 revenue and adjusted income growth of at least 30% and 40%, respectively.
It’s tough not to love Canada Goose’s awesome growth. But with a lofty forward P/E in the mid-70s, I’d wait for a pullback before betting too heavily.
Rounding out our list is Badger Daylighting (TSX:BAD), which spiked as high as 11.5% on Tuesday. Shares of the excavating services specialist are up 14% year to date versus a gain of 3% for the S&P/TSX Capped Industrials Index.
Bay Street is thrilled with Badger’s business momentum. In its Q3 results last week, earnings spiked 59% as revenue increased 20% to $168.7 million. Moreover, gross margin increased 240 basis points on improved cost savings and stronger pricing. The operating strength gave management the confidence to issue an outlook for adjusted EBITDA of $170-$190 million for 2019.
Even after the recent rally, the stock still sports a reasonable forward P/E of 14 to go along with a comforting beta of 0.8.
The bottom line
There you have it, Fools: three stocks that made big gains last week.
As always, they’re not formal recommendations. Just use them as a starting point for further research. Red-hot stocks can burn if you’re not careful, so extra due diligence is required.
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Brian Pacampara owns no position in any of the companies mentioned. Badger Daylighting is a recommendation of Stock Advisor Canada.