Hey there, Fools. I’m back again to highlight three stocks that have recently soared to new 52-week highs. As a refresher, I do this because
- rising stocks are usually being driven by improving fundamentals; and
- positive price momentum can add quite a bit of fuel to a stock’s near-term performance.
So, without further ado, let’s get to this week’s list of risers.
Railway to heaven
Our first flyer is none other than Canadian Pacific Railway (TSX:CP)(NYSE:CP), whose shares hit a new 52-week high of $279.59 on Monday. Over the past year, the railway giant is up a solid 30% versus a gain of 16% for the S&P/TSX Industrials Index.
CP, along with other railway companies, is seeing record traffic in crude shipments as Alberta oil producers continue to struggle with pipeline issues. In Q2, CP’s volumes — as measured by revenue tonne miles — increased 4% year over year, while carloads inched up 2%. Overall, revenue grew 6.7% to $1.75 billion, topping the consensus by $20 million.
Even after the year-long run-up, shares of CP sport a reasonable forward P/E in the high teens. Given the company’s favourable operating environment moving forward, I’d say the risk/reward trade-off remains decent.
Torrid Toro
The next company on our list is Toromont Industries (TSX:TIH), which just hit a new 52-week high of $68.11 on Monday. Over the past six months, shares of the Caterpillar (NYSE:CAT) equipment distributor are up 20%, easily besting the S&P/TSX Composite Index’s return of 6%.
Toromont is starting to reap the benefits of its acquisition of Quebec-based Hewitt Group last year. In Q2, Toromont posted earnings of $67.6 million, up solidly from $40.5 million in the year-ago period. Moreover, revenue spiked 81% to $530.9 million. The company also managed to bring its debt-to-total capitalization down to 28% versus 33% in the prior quarter.
It might be tempting to take some gains off the table, but with management declaring that Toromont is “still in the early days” of realizing growth opportunities, I wouldn’t be so quick to pull the sell trigger.
MEG(A) acquisition
Our final riser this week is MEG Energy (TSX:MEG), whose shares recently spiked to a 52-week high of $11.70. In fact, the oil sands company is up a whopping 42% over just the past few days.
As you might have guessed, MEG’s big pop is buyout related. On Tuesday, Canadian oil and gas company Husky Energy (TSX:HSE) formally offered to acquire MEG in a deal valued at $6.4 billion (including debt). For each share of MEG, MEG shareholders will have the option of receiving $11 in cash or $0.485 of a Husky share.
According to Husky, the combined company will have a total production of more than 410,000 barrels of oil equivalent per day as well as refining capacity of roughly 400,000 bpd.
Of course, when you make more than 40% in one day — as MEG investors have just done — taking at least some dough off the table seems prudent.
Fool on.
Fool contributor Brian Pacampara owns no position in any of the companies mentioned.