Hi there, Fools. I’m back to call your attention to three stocks trading near their three-month highs. Why? Because after a given stock rallies over a short period of time, one of two things tends to happen:
- the stock continues to climb as momentum traders pile on; or
- the stock quickly pulls back as value-oriented investors look to lock in gains.
Buying and holding stocks is still the most reliable way to build wealth. But knowing how to play short-term swings can also help maximize your returns.
Let’s get to it.
Leading off our list is telecom behemoth BCE (TSX:BCE)(NYSE:BCE), which is up 5% over the past three months and trading near its three-month high of nearly $63 per share.
BCE’s Q1 results last month came in below expectations, but that didn’t stop Bay Street from bidding up the shares. Despite missing EPS and revenue estimates, BCE still managed to grow total wireless and internet customers 3.1% and 24.9%, respectively.
“With a favourable profile for all our operating segments as we move forward in 2019, we expect continued free cash flow generation to enable our capital investment plans while fully supporting the increased BCE common share dividend for 2019,” said CFO Glen LeBlanc.
BCE shares currently offer a healthy dividend yield of 4.9%.
Next up we have railroad giant Canadian Pacific Railway (TSX:CP)(NYSE:CP), whose shares are up 13% over the past three months and trade near their three-month highs of about $314.
CP’s recent Q1 results also missed analyst estimates, but as is the case with BCE, the near-term outlook remains favourable. Despite falling short on profit and revenue expectations, management said it expects to grow volumes in the mid-single digits and produce double-digit adjusted EPS growth in 2019.
Due to that confidence, management raised the quarterly dividend 27.5% to $0.83 per share.
“As we look forward, we remain confident in our ability to deliver record financial and operating results in 2019,” said President and CEO Keith Creel.
CP shares currently trade at a forward P/E of 21.
Shop till it drops
Finally, we have e-commerce technologist Shopify (TSX:SHOP)(NYSE:SHOP), which is up a whopping 59% over the past three months and trading near its three-month highs of $309 per share.
The stock soared after posting blowout Q1 numbers in late April, and it’s been on fire ever since. During the quarter, subscription revenue spiked 40% to $141 million, while merchant solutions revenue shot up 58%.
Looking ahead, management sees Q2 revenue of $345 million and full-year revenue of $1.48 billion.
“We’re off to an incredible start this year, as more merchants around the globe choose Shopify to start, grow, and manage their businesses,” said CFO Amy Shapero.
Shopify shares are now up 115% so far in 2019 and sport a price-to-sales of 29.
The bottom line
There you have it, Fools: three red-hot stocks worth checking out.
As always, they aren’t formal recommendations. Instead, look at them as a starting point for further research. Momentum stocks are especially fickle, so plenty of your own due diligence is required.
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Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool owns shares of Shopify and Shopify. Shopify is a recommendation of Stock Advisor Canada.