Hello again, Fools. I’m back to quickly highlight three stocks trading at new 52-week highs. Why? Because after a given stock rallies over a short period of time, one of two things usually happens:
- the stock keeps on climbing as momentum traders pile on; or
- the stock quickly pulls back as value-oriented investors lock in profits.
If you have ambitious goals of turning an average $27K TFSA into $1 million in 20 years, you’ll need an annual return of at least 20% to do it. While momentum stocks are on the fickle side, they can often rally higher (and for longer) than you might expect.
Let’s get to it.
Sunny side up
Leading off our list is life insurance giant Sun Life Financial (TSX: SLF)(NYSE: SLF), whose shares are up 30% in 2019 and are trading near 52-week highs of $59.36 per share.
The stock underperformed in 2018 on lacklustre growth, but fundamentals have certainly firmed up in 2019. In the most recent quarter, for instance, earnings improved to $739 million as revenue jumped 49% to $10.2 billion.
On the strength of those numbers, management also announced a new buyback program for the repurchase of up to 15 million shares.
“We continue to deliver on our strategy with the whole organization rallying behind our purpose of helping clients achieve lifetime financial security and live healthier lives,” said President and CEO Dean Connor.
Sun Life currently offers a healthy dividend yield of 3.6%.
Real opportunity
Next up, we have real estate software technologist Real Matters (TSX: REAL), which is up a massive 228% in 2019 and currently trades near 52-week highs of $11.06 per share.
While many small-cap stocks often spike on wild speculation, Real Matters’s appreciation continues to be supported by impressive fundamentals. In the most recent quarter, adjusted EBITDA margins clocked in at a solid 36% as revenues jumped 24% to $91.4 million.
“We generated consolidated Adjusted EBITDA(A) of $10.4 million — our highest quarter of profitability yet,” said CEO Jason Smith. “Our strong results were driven by market share growth and new clients across both segments, and benefited from a stronger U.S. mortgage refinance market.”
Real Matters shares sport a forward P/E of 45 and a stomach-churning beta of 2.4.
Intelligent choice
Rounding out our list is retail real estate company Choice Properties REIT (TSX: CHP.UN), whose shares are up 25% in 2019 and are trading near 52-week highs of $14.40 per share.
Choice Properties’s big gains continue to be supported by a high-quality portfolio, steady cash flows, and a fat and sustainable dividend yield of 5.2%. In the most recent quarter, operating cash flow jumped to $186 million while funds from operations improved to $170 million.
“We are pleased with both our financial and operational results for the second quarter of 2019,” said CEO Rael Diamond. “With the recent issuances of equity and senior unsecured debentures during the quarter, we’ve strengthened our balance sheet, improved our liquidity and extended our debt maturity profile.”
Choice shares are up 15% over the past year.
The bottom line
There you have it, Fools: three red-hot momentum 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.
Fool on.
