Nearing the end of October, it's good to go over the stocks that went through the recent market sell-off and came out on top. The S&P/ASX 200 Index (ASX: XJO) (Index: ^AXJO) slid around 9% before starting to rally about two weeks ago.
For investors looking at stocks hitting new highs, there's always the problem of paying too much of a premium. On the flipside, you don't want to miss out on good opportunities with winning stocks.
Rather than focusing only on price, you want to know what growth stories are going to drive the companies higher. If the prospects are truly good, today's prices will look cheap a year or two from now.
Here are three stocks that have just hit new highs. I think two have good growth tailwinds, but the third may slow up and take longer to develop.
Westfield Corp Ltd (ASX: WFD), the company that operates Westfield shopping centres outside of Australia in major cities like Los Angeles, London, New York and San Francisco, hit a new 52-week high of $7.89. Shares have steadily risen 23% since January.
The US and UK retail markets have improved recently, but lately one trend is younger shoppers are visiting shopping malls less frequently. This could become a headwind over the long term. The stock pays a decent 3.7% yield unfranked, yet earnings forecasts are for sluggish growth. I would look for stronger growth stocks for now.
Amcor Limited (ASX: AMC) hit $11.62, a new all-time high for the global packaging giant. On the back of an impressive 24.6% net profit gain in FY 2014, the company is focusing on expanding its overseas operations, especially in emerging markets. These are high growth markets which Amcor now gets about 30% of its revenue from.
It de-merged from Orora Ltd (ASX: ORA) last December, so it can concentrate on improving the margins of its core businesses. This is a growth industry because of the high demand for innovative packaging for food, beverage and medical product makers. The stock pays a 3.8% yield unfranked and the company expects earnings to be higher in FY 2015.
Lastly, the telecom and ISP company M2 Group Ltd (ASX: MTU) just keeps on going. Its Dodo Australia and commercial communications brands, Commander and iPrimus, have seen big organic growth in broadband and energy utility management. The stock set a new all-time high at $8.08, rising bullishly 34.4% since early August.
In FY 2015, it plans to roll out more of its successful Dodo kiosks in shopping centres, expand its NBN service footprint and accelerate its Commander sales channels growth. The company expects FY 2015 net profit to gain 15% – 20%. I think this stock is one for investors to watch closely.
