The S&P/ASX 200 (ASX:XJO) (Index:^AXJO) might have struggled to produce any meaningful gains over the past year, but there has been a nice selection of top-performing stocks.
The stocks below have outperformed the index by more than 10% over the past year and by more than 50% over the past three years. While it can be tempting to chase the best performing stocks of the last year, it is still important to consider the current valuation and outlook for each company.
M2 Group Ltd (ASX: MTU)
The share price of M2 Group has almost doubled in value over the past year as the market finally appreciated the company's acquisitive growth strategy. M2 has been one of few companies that has actually been able to generate synergies from its acquisitions and this has boosted its bottom line.
Earnings per share and dividends have been increasing steadily over the past five years and M2 is forecasting more strong growth for this year.
The shares are now trading at around 21x FY15 earnings, and although this is a discount to some other companies in the sector, I think the shares are fully valued at the moment.
Harvey Norman Holdings Limited (ASX: HVN)
Improving consumer confidence and the booming residential property market has helped Harvey Norman back into the winners' circle. The share price is up over 150% since 2012 and an analyst upgrade has seen the share price rise by nearly 10% today.
Harvey Norman's extensive property portfolio has also benefited from the stronger property market and is now worth more than $2.3 billion.
Although retail spending has been improving in some of Harvey Norman's key categories, I believe the company will face a much higher level of competition from discount retailers especially in the electronics and home appliance categories.
The shares are now trading at around 20x FY15 earnings and I think investors should take advantage of today's strong increase and look for more attractive alternatives.
Automotive Group Holdings Ltd (ASX: AGH)
The share price of Automotive Holdings has been steadily increasing since 2012 as the company has successfully become Australia's largest automotive dealership group as well as the country's largest refrigerated transport logistics provider.
The company is sitting on close to $80 million worth of cash and it is likely that Automotive Holdings will be looking for further acquisitions to boost shareholder returns.
The shares still appear to be attractively priced and investors can expect to receive a fully franked dividend yield of close to 5%.
DuluxGroup Limited (ASX: DLX)
Although the share price of Dulux has fallen from its all time high over the past three months, long-term shareholders have received an average annual return of close to 30% over the past three years. That's pretty impressive and it appears as though the share price has started to trend back to its all time high.
Dulux owns some of the most well known and trusted brands in the paint and construction sector and has the additional benefit of selling its products in its own branded trade stores as well as through the major hardware stores like Bunnings and Masters.
The company has benefited from the surge in popularity of various building and renovation television programs as well as an increase in building and construction activity in the wider economy.
The shares are currently trading at around 20x FY15 earnings and this looks like a fair valuation considering short-term earnings growth is expected to be positive but less than previous years.
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