Hi, Fools. I’m here again to highlight three stocks trading at (or near) 52-week highs. Why? Because when a stock climbs to a new 52-week high, one of two things usually happens:
- The stock continues to make new highs as momentum-oriented traders climb on for the ride; or
- The stock pulls back as value-focused investors take profits off the table.
The S&P/TSX Composite Index has had a solid start to 2019 — up about 10% year to date — so it might make sense to look at a few particularly strong performers.
Kicking off our list is Enbridge (TSX:ENB)(NYSE:ENB), whose shares hit a new high of $49.39 earlier this week. After mediocre performance in 2018, the energy pipeline company is already up 16% in 2019 versus a gain of 9% for the S&P/TSX Capped Energy Index.
The oil glut in Alberta seems to be easing, while Enbridge’s fundamentals remain solid. In December, management upped the quarterly dividend by 10%, and said it still expects full-year distributable cash flow in the upper half of its guidance of $4.15-4.45 per share.
“We’re confident our best-in-class assets and low-risk business model will generate shareholder value as we continue to deliver on our plans,” said President and CEO Al Monaco.
With the stock boasting a juicy dividend yield of 6%, betting on that optimism makes a tonne of sense.
Next up, we have CGI Group (TSX:GIB.A)(NYSE:GIB), which recently hit a 52-week high of $89.42 per share. Shares of the IT services specialist are up 25% over the past year versus a gain of 18% for the S&P/TSX Capped Information Technology Index.
CGI continues to fire on all cylinders. In the company’s Q4 results last week, net earnings clocked in at $311.5 million, as revenue increased 5.2% to $2.96 billion. Moreover, the net margin expanded 40 basis points.
“I am encouraged by the broad-based growth we are experiencing across all regions, accelerated by our recent metro market mergers,” said President and CEO George Schindler.
Of course, with the stock now sporting a forward P/E of 20 and PEG of 2.3, I’d wait for some of the excitement to fade before diving in.
Rounding out our list is Waste Connections (TSX:WCN)(NYSE:WCN), whose shares hit a 52-week high of $111.25 on Tuesday. Over the past year, the waste management company is up 27% versus a gain of just 6% for the S&P/TSX Capped Industrials Index.
The company is set to report its Q4 results next week, and it’s clear that investors expect good news. Last quarter, adjusted income increased 15% and solid waste pricing grew 4.5%, suggesting that management is on track to meet its full-year expectations.
“This price-led solid waste growth, along with continued strength in E&P waste activity, enabled us to overcome the toughest quarterly comparison for recycled commodity values in the year and certain continuing cost pressures,” said CEO Ronald Mittelstaedt.
At a P/E of 30, however, sitting on the sidelines for a better entry point seems prudent.
The bottom line
There you have it, Fools: three stocks at or near 52-week highs worth checking out.
As always, don’t view them as formal recommendations. They’re simply ideas worth further research. Momentum stocks are particularly fickle, so extra due diligence is necessary.
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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. CGI Group and Enbridge are recommendations of Stock Advisor Canada.