27 ASX stocks rallying to 52-week highs and defying recession expectations
Consumer discretionary stocks are running hot despite fears of a looming recession.
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Mentioned
KEY POINTS
- 26 companies hit 52-week highs since April 24
- Consumer discretionary stocks are running hot despite fears of a looming recession.
- Liontown Resources (ASX: LTR) leads the calendar year, returning 115%
Momentum investing is premised on the idea that trends are self-reinforcing. If a stock is moving upward, then it is more likely to keep doing so.
52-week highs are one way to gauge this momentum. Research by Thomas J. George and Chuan-Yang Hwang has found that stock prices historically perform better the closer they are to their 12 month high water mark.
This wire looks at the stocks that hit 52 week highs since April 24, and what this is telling us about performance across the sectors.
Note: ASX 200 companies that have made 52-week highs since 24 April. Share prices and performance refers to last close on Monday, 8 May
Stocks that hit 52-week highs last week
Ticker | Company | Last | YTD | 1-Yr | Sector |
|---|---|---|---|---|---|
TLX | Telix Pharmaceuticals | $ 10.88 | 49.66% | 142.37% | Healthcare |
LTR | Liontown | $ 2.85 | 115.91% | 95.53% | Materials |
WTC | Wisetech Global | $ 68.15 | 34.29% | 55.97% | Technology |
LOV | Lovisa Holdings | $ 26.02 | 12.59% | 48.14% | Consumer Cyclical |
NAN | Nanosonics | $ 5.39 | 25.64% | 42.55% | Healthcare |
TNE | Technology One | $14.71 | 11.95% | 38.85% | Technology |
GOR | Gold Road Resources | $ 1.97 | 16.27% | 30.10% | Materials |
WEB | Webjet | $ 7.28 | 17.80% | 19.87% | Consumer Cyclical |
FPH | Fisher & Paykel Healthcare | $ 25.05 | 17.72% | 19.54% | Healthcare |
SUL | Super Retail Group | $ 12.83 | 19.79% | 16.58% | Consumer Cyclical |
QBE | QBE Insurance | $ 15.46 | 15.12% | 15.80% | Financial Services |
CAR | Carsales.Com | $ 23.11 | 12.12% | 15.74% | Communication Services |
AUB | AUB Group | $ 26.59 | 18.02% | 14.96% | Financial Services |
BLD | Boral | $ 4.02 | 39.10% | 14.64% | Materials |
ORG | Origin Energy | $ 8.42 | 9.07% | 13.72% | Utilities |
SOL | Washington H Soul Pattinson | $ 31.90 | 15.33% | 11.61% | Energy |
SGP | Stockland | $ 4.58 | 26.17% | 11.19% | Real Estate |
WOR | Worley | $ 16.01 | 6.73% | 6.90% | Industrials |
BKW | Brickworks | $ 25.11 | 13.26% | 4.68% | Materials |
TLS | Telstra | $ 4.33 | 8.52% | 3.26% | Communication Services |
REH | Reece | $ 18.23 | 28.83% | 2.61% | Industrials |
AGL | AGL Energy | $ 8.92 | 10.53% | 1.14% | Utilities |
WES | Wesfarmers | $ 51.50 | 12.18% | -1.70% | Consumer Cyclical |
FLT | Flight Centre Travel | $ 21.74 | 50.03% | -1.89% | Consumer Cyclical |
TCL | Transurban Group | $ 14.69 | 13.17% | -2.74% | Industrials |
ALQ | ALS | $ 12.64 | 3.35% | -5.10% | Industrials |
Interesting observations
Consumer cyclicals rally despite possible recession.
Ticker | Company | Last | YTD | 1-Yr | Sector |
|---|---|---|---|---|---|
LOV | Lovisa Holdings | $ 26.02 | 12.59% | 48.14% | Consumer Cyclical |
WEB | Webjet | $ 7.28 | 17.80% | 19.87% | Consumer Cyclical |
SUL | Super Retail Group | $ 12.83 | 19.79% | 16.58% | Consumer Cyclical |
WES | Wesfarmers | $ 51.50 | 12.18% | -1.70% | Consumer Cyclical |
FLT | Flight Centre Travel | $ 21.74 | 50.03% | -1.89% | Consumer Cyclical |
Consumer cyclicals are usually the first sector to be hit when slowing growth and rising rates bite.
Retail sales volumes fell 0.6 per cent in the March quarter, according to the ABS, following a 0.3 per cent fall in the December quarter of 2022. "Outside of the COVID-19 pandemic period, this is the largest fall in retail sales volumes since the September quarter 2009," said ABS head of retail statistics Ben Dorber.
But the stock market is not the economy. The S&P/ASX200 Consumer Discretionary Index returned -22.65% in 2022. So, what we’re seeing now may be some reversion to the mean.
There are some other possible explanations in the mix, too, with Flight Centre and Webjet benefiting from pent-up travel demand.
Materials continue to provide boost to the XJO
Ticker | Company | Last | YTD | 1-Yr | Sector |
|---|---|---|---|---|---|
LTR | Liontown | $ 2.85 | 115.91% | 95.53% | Materials |
GOR | Gold Road Resources | $ 1.97 | 16.27% | 30.10% | Materials |
BLD | Boral | $ 4.02 | 39.10% | 14.64% | Materials |
BKW | Brickworks | $ 25.11 | 13.26% | 4.68% | Materials |
Materials companies continue to be the economic gift that keeps giving. The sector has returned 3.31% this calendar year and 9.31% over the past 12 months. Liontown leads the way, thanks to talk of a takeover by US lithium giant Albemarle.
Macquarie maintains an OUTPERFORM rating on the stock, nonetheless, with a price target of $3 despite holding funding concerns for the Kathleen Valley Spodumene and Lithium Hydroxide projects.
On Boral, Citi remains bullish with a BUY rating. “We see significant upside to BKW from the realisation of property development gains as well as longer term upside on conversion of land to industrial assets.”
Healthcare the top performer over 52 weeks
Ticker | Company | Last | YTD | 1-Yr | Sector |
|---|---|---|---|---|---|
TLX | Telix Pharmaceuticals | $ 10.88 | 49.66% | 142.37% | Healthcare |
NAN | Nanosonics | $ 5.39 | 25.64% | 42.55% | Healthcare |
FPH | Fisher & Paykel Healthcare | $ 25.05 | 17.72% | 19.54% | Healthcare |
Telix is on a tear this year, returning almost 50% this calendar year and 142% over the past 12 months, thanks to a 27% boost in revenue in Q1 and a 15% lift in customer receipts.
Moreover, it last month announced that it had successfully demonstrated proof-of-concept using an antibody called olaratumab to target tumours via radiation therapy. The treatment is now moving to first-in-human clinical trials.
