Home > Stock Analysis

52-Week High Five

Posted: Feb 16, 2009 09:19 AM by Glenn Curtis

Tickers in this Article: PBY, AAP, OCN, PALM, HOTT, COCO, AZO

A stock that recently hit a 52-week low has a good chance of continuing to drag and possibly hitting a new low. After all, existing shareholders may become disillusioned and move on to greener pastures. On the flip side, stocks that have recently hit a 52-week high stand a good chance of doing well and maybe even making a new high.

Get Free Stock Analysis By Email

The reason: News organizations might report that the shares hit a high, and excited investors might want to hop on the bandwagon. Also, portfolio managers may look to accumulate shares of winning issues to dress up their portfolios at quarter's end.

IN PICTURES: 20 Tools For Building Up Your Portfolio

Five Stocks With 52-Week Highs
With that in mind, I uncovered five stocks that have recently made a 52-week high. My thinking is that the issues on the list may be worthy of further follow-up research. (To learn more about 52-week highs and lows, check out the 52-Week Highs/Lows section of our Market Breadth Tutorial.)

Here are some of the companies that I found:

Company	Market Capitalization	Hit 52-Week High (Date)
AutoZone (NYSE:AZO)	$8 Billion	February 6, 2009
Corinthian Colleges (Nasdaq:COCO)	$1.7 Billion	February 3, 2009
Hot Topic (Nasdaq:HOTT)	$409.2 Million	February 10, 2009
Ocwen Financial(NYSE:OCN)	$579.5 Million	February 10, 2009
Palm (Nasdaq:PALM)	$993.6 Million	February 12, 2009
Data as of market close February 12, 2009

AutoZone Reports A Strong Q1
Americans may not be buying new cars, but it appears they are plunking down money to fix the ones they already have. Check out the first-quarter earnings release for AutoZone, the Tennessee-based auto parts retailer.

In the period ended November 22, AutoZone earned $2.23 a share, a nice little jump from the $2.02 a share it earned in the comparable period the year before. The EPS number was also 4 cents north of analysts' expectations. In terms of revenue, AutoZone took in about $1.48 billion, which was a 1.6% improvement from the year before. And although its domestic comps were down 1.5% in the quarter, in this environment that's something to be proud of. (For more on analyst expectations, be sure to read Analyst Recommendations: Do Sell Ratings Exist?)

Interestingly, Pep Boys (NYSE:PBY) saw its comp store sales decline by more than 10% in its Q3 ended November 1. Meanwhile, Virginia-based Advance Auto Parts (NYSE:AAP) saw a 0.1% comp sales decline in its Q3 ended October 4.

Repurchasing Shares
It's worth noting that in its Q1 release, AutoZone said that it repurchased 2.2 million shares of its common stock for $272 million during the quarter at an average price of $122 per share. My hunch is that the company wouldn't be dropping that kind of money on its stock unless it thought it was a decent value. Incidentally, in December its board approved the buyback of an additional $500 million in stock.

AutoZone is expected to earn $10.82 a share in the current year and $11.91 next year, according to data on Yahoo Finance. This means that the company trades at about 12.9 times the current year estimate and at roughly 11.7 times next year's estimate. That catches my eye given that the company is, again according to data on Yahoo Finance, expected to grow at a greater than 11% clip per annum in the next five years.

The shares hit a 52-week high on February 6, and I have a hunch they may hit a new high.

Bottom Line
Just because a stock has recently hit a 52-week high is no guarantee that it will do so again. However, these stocks may garner attention from the investment community. Such companies are often worth a closer look.

By Glenn Curtis

Glenn Curtis started his career in the 1990s as an equity analyst for a regional firm in New Jersey. There, he covered companies in the technology, entertainment, and gaming industries. Curtis has since worked as a financial writer at a series of both web and print publications, including TheStreet.com and Registered Rep Magazine. He has held his series 6,7,24, and 63 securities licenses.

Rate this Article: Your Rating: Overall Rating: Vote Now!

MORE STOCK ANALYSIS