Hello, 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.
While momentum stocks are on the fickle side, they can often rally higher (and for longer) than you might expect. So, if you’re looking to get your 2020 returns off to a hot start, this list might be a good place to begin.
Let’s get to it.
Leading off our list is financial services giant National Bank of Canada (TSX:NA), whose shares are up 22% in 2019 and are trading near 52-week highs of $68.33 per share.
The stock’s outperformance continues to be fueled by strong operating momentum. In the most recent quarter, for instance, earnings improved 7% to $608 million as revenue increased 5.4% to $1.95 billion. Meanwhile, return on equity clocked in at a solid 18.6%.
“Each business segment contributed to earnings growth, helping the Bank to post solid performance in the third quarter of fiscal 2019,” said CEO Louis Vachon. “In an environment of economic and geopolitical uncertainty, the bank will maintain its disciplined approach to managing costs, credit and capital.”
National Bank trades at a forward P/E of 10 and offers a dividend yield of 4%.
Next up, we have supply chain software specialist Kinaxis (TSX:KXS), which is up a solid 45% in 2019 and currently trades near 52-week highs of $98 per share.
Kinaxis’s big jump came on Friday after posting blowout Q3 results. During the quarter, EPS came in at $0.17 as revenue spiked 29% to $47.1 million. Looking ahead, management sees full-year revenue of $188-$190 million.
“As expected, our success in the second quarter winning some very large new customers, such as British American Tobacco, Honda, Yamaha Motors, Teva Pharmaceuticals and others has led to faster SaaS revenue growth in Q3,” said CEO John Sicard. “Bookings were strong again in the third quarter, such that our backlog has grown further and provides excellent visibility into the remainder of 2019.”
Kinaxis currently trades at a forward P/E of 73.
Rounding out our list is diversified holdings giant Brookfield Asset Management (TSX:BAM.A)(NYSE:BAM), whose shares are up 40% in 2019 and are trading near 52-week highs of $74 per share.
Brookfield’s solid gains continue to be supported by robust cash flows, record-level liquidity, and strong fees. In the most recent quarter, funds from operations (FFO) improved to $1.09 per share while fee-related earnings jumped 33% to $263 million
“We continued to find attractive opportunities to invest capital, investing $7 billion in the second quarter and $33 billion over the past year on behalf of our investors,” said CEO Bruce Flatt. “We further increased our liquidity to a record level of approximately $50 billion, which positions us to opportunistically deploy capital across our listed and private funds.”
Brookfield currently offers a dividend yield of 1.2%.
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.
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 and recommends Brookfield Asset Management and BROOKFIELD ASSET MANAGEMENT INC. CL.A LV. The Motley Fool recommends KINAXIS INC.