Hello again, Fools. I’m back to highlight three stocks that have recently risen to new 52-week highs. As a reminder, I do this because rising stock prices are usually driven by an improvement in fundamentals (what we care about most here at The Fool); and tend to attract even more attention from buyers over the short term. Valuation still matters, of course. But as long as you’re careful not to pay too high of a price, quality momentum plays can provide satisfying gains. So, without further ado, let’s get to this week’s red-hot ideas. Rental income riches Leading…
Hello again, Fools. I’m back to highlight three stocks that have recently risen to new 52-week highs. As a reminder, I do this because rising stock prices
Valuation still matters, of course. But as long as you’re careful not to pay too high of a price, quality momentum plays can provide satisfying gains.
So, without further ado, let’s get to this week’s red-hot ideas.
Rental income riches
Leading off our list is InterRent REIT (TSX:IIP.UN), whose shares hit a 52-week high of $12.27 on Friday. Over the past year, the multi-residential REIT is up an impressive 45% versus a gain of just 6% for the S&P/TSX Capped REIT Index.
InterRent continues to benefit from strong demand in its key markets. In Q2, net operating income spiked 25% to $20 million on a 17% increase in gross rental revenue. More importantly, funds from operations (FFO) — the key cash flow metric for REITs — clocked in at $10.9 million, a 31% jump over the year-ago period.
Thanks to that strength, management upped its distribution 11%. With the stock still sporting a decent yield of 2.3%, along with a comforting beta of 0.4, InterRent’s downside looks limited even at these elevated levels.
Healthy momentum
Next up we have Viemed Healthcare (TSX:VMD), which managed to reach a 52-week high of $8.75 last week. Shares of the healthcare equipment specialist have gained a whopping 228% year to date, while the S&P/TSX Capped Health Care Index is up 36% over the same time period.
Viemed is adding patients to its therapy at a breakneck pace. In Q2, revenue spiked 42% to $15.5 million as its ventilator patient count jumped 35%. Meanwhile, gross margin expanded 44%, suggesting that its cost structure and competitive position are also improving. That performance is especially impressive given Viemed’s rock-solid balance sheet.
Looking forward, management expects Q3 revenue growth of about 33% on similar margins.
The stock isn’t dirt cheap after the monstrous run-up. But at a forward P/E of 24, Viemed’s solid growth prospects remain priced very reasonably.
Golden gainer
Finally, we have Wesdome Gold Mines (TSX:WDO), whose shares climbed to a 52-week high of $4.18 on Friday. The small-cap gold miner has more than doubled over the past six months, while the S&P/TSX Capped Materials Index is down 8% during the same time period.
Wesdome’s production continues to blow Bay Street estimates out of the water. Earlier this month, management announced that year-to-date production now stands at 54,371 ounces. The company is well positioned to achieve its raised guidance range of 70,000-75,000 for the current quarter. In other words, Wesdome’s production is more than offsetting the weak price of gold.
When you couple that positive operating momentum with a rock-solid financial position — Wesdome has zero debt on its balance sheet — the stock’s risk/reward tradeoff remains attractive.
Fool on.
Attention Investors: On April 25th, 2018, something incredible happened…
The Motley Fool’s Iain Butler has just revealed an ultra rare “triple down” stock recommendation. And investors all over Canada are rushing to get in. Why? Because past “triple downs” have averaged over 100% returns, and sometimes as much as 440% returns (in just over two years’ time)…
To discover the brand-new “triple down” recommendation, simply click here. You’ll be whisked to a special investor memo prepared by The Motley Fool Canada. The only catch is you’ll have to hurry! This brand-new report could be withdrawn at any time.
Brian Pacampara owns no position in any of the companies mentioned. Viemed is a recommendation of Hidden Gems Canada.