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52-Week High Alert: 3 White-Hot Stocks to Carry You Into 2020

Brian Pacampara, CFA
little girl in pilot costume playing and dreaming of flying over the sky
little girl in pilot costume playing and dreaming of flying over the sky

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.

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.

Home sweet home

Leading off our list is mortgage lender Home Capital Group (TSX:HGC), whose shares are up a whopping 91% over the past year and are trading near 52-week highs of $34.30 per share.

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The stock’s outperformance continues to be fueled by strong operating momentum. Just yesterday, the shares jumped 15% after Home Capital’s adjusted EPS spiked 76% in Q3. Moreover, mortgage originations improved 7.6% and total loan portfolio increased 6.4%, giving shareholders plenty of encouragement.

“The Home team delivered strong financial results, showcased our culture of innovation by completing the first Canadian cross-border Residential Mortgage-Backed Securities offering, and continued to make progress on our digital transformation journey,” said CEO Yousry Bissada.

Home Capital shares trade at a forward P/E of 11.

Renewed interest

Next up, we have renewable power company Brookfield Renewable Partners (TSX:BEP.UN)(NYSE:BEP), which is up 14% in 2019 and currently trades near 52-week highs of $59 per share.

It has been a year of steady growth for the shares, with the latest rally coming after strong Q3 results earlier this week. During the quarter, funds from operations (FFO) improved 27% to an impressive $133 million.

More importantly, Brookfield maintained highly comforting total liquidity of $2.5 billion.

“We continued to execute on key strategic priorities in the third quarter including a number of new investments, improved operations, and generating liquidity to bolster our already strong balance sheet,” said CEO Sachin Shah.

Even after the recent price appreciation, Brookfield Renewable shares currently offer an attractive dividend yield of 4.6%.

Energetic price

Rounding out our list is energy storage and transportation company Gibson Energy (TSX:GEI), whose shares are up 37% in 2019 and are trading near 52-week highs of $26 per share.

Gibson’s solid gains continue to be supported by strong scale (12 million barrels of storage and over 500 km of crude pipelines) and highly stable cash flows. In the most recent quarter, distributable cash flow clocked in at $72 million.

More importantly, that translates into a still highly comforting payout ratio of 60%.

“Gibson continued to deliver strong, consistent operational and financial results in the third quarter, with the continued growth of long-term, high-quality cash flows from our Infrastructure segment while the contribution from Marketing meaningfully exceeded our expectations,” said CEO Steve Spaulding.

Gibson currently offers an attractive dividend yield of 5.1%.

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.

More reading

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool recommends Brookfield Renewable Partners.

The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool Canada’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Motley Fool Canada 2019