Hi there, 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.
So, if you’re a momentum investor straining for good ideas amid the current market panic, this list is a good place to begin.
To be or not to be
Leading off our list is gold producer B2Gold (TSX:BTO)(NYSE:BTG), whose shares are up a whopping 115% over the past year and currently trade near 52-week highs of $7.88 per share.
Naturally, the stock has been flying largely on the strength of gold prices, but production has also been impressive.
Earlier this week, B2Gold quarterly revenue jumped 44%, while operating cash flow soared 151%. Management cited a 25% increase in gold production for the solid report. On that strength, B2Gold doubled its quarterly dividend to $0.02 per share.
More importantly, B2Gold ended the quarter with a solid balance sheet of $208 million in cash.
Looking ahead, the company maintains its 2020 production guidance of one million-1.05 million oz. of gold with all-in costs of $780-$820/oz. sold.
“Based on current assumptions for 2020, B2Gold remains well positioned for continued strong operational and financial performance,” wrote the company.
B2Gold currently trades at a P/E in the low-20s.
Shop till it drops
Shopify’s red-hot run has been backed by strong fundamentals, and it doesn’t like the momentum will slow anytime soon. Earlier this week, Shopify’s Q1 EPS of $0.19 topped estimates by $0.36, as revenue jumped 47% to $470 million.
Management cited a jump in merchants joining the platform, strong app growth, and platform fee revenue growth for the market-topping quarter.
“The spread of COVID-19 is going to be a tough time for all entrepreneurs,” said CEO Tobi Lütke. “We are working as fast as we can to support our merchants by re-tooling our products to help them adapt to this new reality. Our goal is that, because Shopify exists, more entrepreneurs and small businesses will get through this.”
Shopify shares currently trade at a price-to-sales ratio of about 50.
The real deal
Rounding out our list is mortgage lending software specialist Real Matters (TSX:REAL), whose shares are up a monstrous 247% over the past year and currently trade near 52-week highs of $21.74 per share.
Real Matters shares continue to be fueled by breakneck growth, giving momentum investors plenty of reason to keep piling on. In the company’s Q2 results earlier this week, EPS clocked in at $0.13 as revenue soared 73% to $110 million.
Moreover, management repurchased one million shares and ended the quarter with $89 million in cash on its balance sheet.
“We maintain a strong balance sheet to weather the cyclical and seasonal nature of the industry we operate in, and to weather financial shocks and crises like the one COVID-19 is having on the world and the world economy,” wrote the company.
Real Matters shares currently trade at a forward P/E in the low-40s.
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.
One little-known Canadian IPO has doubled in value in a matter of months, and renowned Canadian stock picker Iain Butler sees a potential millionaire-maker in waiting...
Because he thinks this fast-growing company looks a lot like Shopify, a stock Iain officially recommended 3 years ago - before it skyrocketed by 1,211%!
Iain and his team just published a detailed report on this tiny TSX stock. Find out how you can access the NEXT Shopify today!
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.
Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends Shopify and Shopify.