ASX 200 stocks hitting 52-week highs and lows: Real Estate and Staples

Welcome back to the 52-week Series – A recap of ASX 200 stocks marking yearly highs and lows in the past week.

The market has been relatively heavy as of late, with the ASX 200 down 3.7% in the last eight sessions to a near four month low. This weakness has seen very few stocks hit 52-week highs, while driving further weakness underperforming sectors such as Real Estate and Staples.

Highs & Lows by Sector

• Real Estate: 0 Highs, 10 Lows

• Materials: 1 High, 5 Lows

• Staples: 0 Highs, 5 Lows

• Healthcare: 1 High, 4 Lows

• Discretionary: 1 High, 2 Lows

• Financials: 1 High, 2 Lows

• Industrials: 1 High, 2 Lows

• Technology: 0 Highs, 1 Low

• Utilities: 1 High, 1 Low

• Energy: 1 High, 0 Lows

Stocks at 52-week highs

What are some of the key characteristics that have helped these share prices withstand broader market weakness?

• Not very volatile: Stocks like Aristocrat Leisure, Deterra Royalties and Seven Group tend to be rather low volatility stocks that grind out a small gain over a prolonged period of time. When the market rallies, they tend to nudge a little higher. Fortunately, when the market tumbles, they also tend to hold up relatively well. Now before you tell me "but shares in Seven are up almost 30% since early July" – Yes its been on a tear but the stock tends to rise no more than +/-1% on most days.

• Uranium: Uranium stocks are soaring as spot prices push past US$65 a pound to the highest level since the Fukushima nuclear incident in 2011. There have been signs of increased demand for uranium, which is driving the Sprott Physical Uranium Trust to restart purchasing. While Paladin is one of the only uranium stocks in the ASX 200, several All Ords peers like Boss Energy, Deep Yellow and Bannerman Energy have all hit fresh 52-week highs in recent days.

• Reporting season winners: Seven Group and Hub24 are two stocks that topped earnings expectations back in August. An earnings beat is typically followed by all the good stuff: positive broker notes and target price upgrades, strong volumes as investors and institutions accumulate more stock, upbeat news coverage etc.

Stocks at 52-week Lows

One of my favourite quotes about 52-week highs and lows is by a US trader named Mark Minervini. In his book Trade like a Stock Market Wizard he notes “when you see a growing number of names in a particular industry making new 52-week highs (especially coming off a market low), this could be an indication that a group advance is underway.”

The same theory applies for lows. And that's what we've seen for three key sectors: Healthcare, Staples and Real Estate.

• Healthcare: Stocks in this sector have faced a broad range of headwinds including weaker-than-expected earnings (CSL), cycling elevated covid earnings (HLS) and a new weight-loss drug that might serve as a cure for sleep apnea (RMD).

• Staples: The Staples sector faces several headwinds such as the rising cost of living, fixed rate mortgage roll-offs and elevated cost inflation. According to the National Retail Association, theft is costing Australian retailers $9 billion or 2% of sales. UBS says consumers are increasingly shifting consumption towards private label products, which is dilutive for underlying gross profits. It's certainly not an easy time to be a retailer, even if you're selling staples.

• Real Estate: Last week, 6 REITs hit fresh 52-week lows. This week, we're at 10. The rate sensitive sector continues to suffer as bond yields break out. The Australia 10-year yield is up 37 bps since the start of August to 4.37%, a level not seen since January 2014.