Hi, Fools. I’m back to highlight three stocks that rallied sharply last week. Why? Because after a stock shoots up over a short period of time, one of two things usually happens: the stock continues to soar as traders look to capitalize on the momentum, or the stock pulls back as value-oriented investors look take profits off the table.
Holding on for the long term is important. But knowing how to react to big short-term swings can also help boost your returns — particularly in a TFSA account where profits are tax free.
Without further ado, let’s get to it.
Leading off our list is accessibility solutions specialist Savaria Corp (TSX:SIS), whose shares soared 16% last week.
The rally was triggered by record year-end results. For the full year 2018, operating income climbed 17.4% as revenue spiked 56%. And while net income declined over 2017, Savaria managed to increase its annual dividend 21% to $0.42 per share.
“With 1400 employees, 28 direct sales offices and 9 factories comprising over 640,000 squqre feet of production space, the Savaria of today covers significantly more geography, products and distribution channels than ever before,” said President and CEO Marcel Bourassa.
Despite last week’s pop, Savaria shares remain down more than 20% over the past six months. Currently, they sport a reasonable forward P/E of 21 and dividend yield of 2.9%.
Berry good quarter
The majority of that gain came on Friday, when BlackBerry posted impressive Q4 results. During the quarter, EPS clocked in at $0.08 versus a loss of $0.06 in the year-ago period. Meanwhile, software and services revenue — a key metric when gauging BlackBerry’s turnaround — improved 14% to $248 million.
“We delivered on all of our fiscal 2019 financial commitments and created a solid foundation for continued profitable revenue growth in fiscal 2020,” said CEO John Chen. “I am pleased to note that BlackBerry is recognized as a $1 billion plus revenue company in security software.”
Looking forward, management expects full-year 2020 revenue growth of 23%-27%.
BlackBerry shares are now up a whopping 39% in 2019.
Rounding out our list of gainers is convenient store operator Alimentation Couche-Tard (TSX:ATD.B), which popped a solid 8% last week.
Alimentation posted record quarterly results two weeks ago, and traders have been bullish ever since. In Q3, earnings jumped 27% to $612.1 million as revenue increased 5% to $16.5 billion. Meanwhile, same-store merchandise sales — a key retail metric — grew 4.9% in Canada, 4.5% in the U.S., and 2.9% in Europe.
On the strength of those numbers, management boosted its quarterly dividend 25% to $0.125 per share.
“I am very pleased with the strong and balanced results we had this quarter,” said President and CEO Brian Hannasch. “In particular, we had solid growth in year-over-year same store merchandise revenues in all our markets.”
Alimentation shares are up 37% over the past year.
The bottom line
There you have it, Fools: three red-hot stocks that might worth checking out.
They aren’t formal recommendations, of course; they’re simply a starting point for further research. Momentum stocks are particularly tricky to handle, so plenty of due diligence is still necessary.
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.
Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool owns shares of BlackBerry. BlackBerry and Alimentation Couche-Tard are recommendations of Stock Advisor Canada.