Why stocks from these 3 sectors are rallying to 52-week highs
Building materials stocks are outperforming the market, led by Boral and James Hardie.
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Mentioned
KEY POINTS
- Building materials stocks are outperforming the market, led by Boral and James Hardie
- Technology stocks are also rallying, with Carsales, Life360 and REA Group delivering strong results
- Real estate stocks are under pressure, with Charter Hall, Growthpoint and Abacus Group hitting 52-week lows
Welcome back to the 52-week Series – a recap of ASX 200 stocks marking yearly highs and lows in the past week.
# Highs and lows by sector
Materials – 4 highs, 1 low
Discretionary – 6 highs, 0 lows
Energy – 1 high, 0 lows
Financials – 0 highs, 0 lows
Healthcare – 1 high, 0 lows
Industrials – 2 highs, 0 lows
Real Estate – 0 highs, 7 lows
Staples – 2 highs, 0 lows
Technology – 4 highs, 0 lows
Utilities – 0 highs, 0 lows
Stocks Making 52-week Highs
Ticker | Company Name | Close Price | Sector | 1 Year |
|---|---|---|---|---|
G.U.D. | $11.74 | Discretionary | 31.3% | |
News Corp | $33.89 | Discretionary | 25.2% | |
Reece | $20.50 | Discretionary | 30.0% | |
Breville Group | $24.14 | Discretionary | 5.7% | |
Aristocrat Leisure | $41.34 | Discretionary | 16.0% | |
Domain | $4.03 | Discretionary | -1.7% | |
Worley | $17.66 | Energy | 24.5% | |
Pro Medicus | $72.51 | Healthcare | 36.2% | |
Seven Group | $26.71 | Industrials | 48.1% | |
Seek | $24.66 | Industrials | 1.2% | |
Boral | $5.09 | Materials | 72.5% | |
CSR | $5.89 | Materials | 25.9% | |
Orora | $3.66 | Materials | 5.8% | |
James Hardie | $47.11 | Materials | 28.5% | |
United Malt Group | $4.93 | Staples | 44.6% | |
Costa Group | $3.37 | Staples | 19.9% | |
Life360 Inc | $9.01 | Technology | 63.8% | |
Carsales.Com | $27.10 | Technology | 19.2% | |
Nextdc | $13.30 | Technology | 15.7% | |
REA Group | $158.85 | Technology | 17.8% | |
Wisetech Global | $87.61 | Technology | 61.4% |
Key themes and takeaways:
Building materials stocks have been marking consistent fresh 52-week highs since late June and further bolstered by recent earnings from Boral and James Hardie.
Rotation into early cycle sectors says Macquarie: "Based on share price reactions recently, the market seems to want to rotate to early cycle sectors such as Building Materials and Retail as slowing inflation and the RBA pause seem to support positioning for a soft landing."
Technology stocks have rallied on the back of AI hype but they're also delivering against expectations, with solid results from Carsales, Life360 and REA Group.
Macquarie upgraded REA Group from Neutral to Buy after its FY23 results, citing "we recently turned more positive on the cycle and with risk on business levers skewed to the upside."
Stocks Making 52-week Lows
Ticker | Company Name | Close Price | Sector | 1 Year |
|---|---|---|---|---|
Abacus Group | $1.16 | Real Estate | -60.0% | |
Charter Hall Long Wale Reit | $3.60 | Real Estate | -20.2% | |
Charter Hall Retail Reit | $3.52 | Real Estate | -13.9% | |
Core Lithium | $0.55 | Materials | -66.3% | |
Charter Hall | $2.67 | Real Estate | -29.0% | |
Region Group | $2.27 | Real Estate | -23.1% | |
Growthpoint Properties | $2.65 | Real Estate | -29.1% | |
Charter Hall Group | $10.42 | Real Estate | -19.4% | |
Resmed Inc | $28.34 | Healthcare | -15.2% | |
The Star Entertainment | $1.14 | Discretionary | -57.8% | |
Lake Resources | $0.25 | Materials | -83.2% | |
Sayona Mining | $0.13 | Materials | -55.4% |
Real Estate is experiencing a sector wide decline on headwinds including:
Fair value losses incurred on investment properties: A household name like Dexus reported a statutory net loss of $752.7 million in FY23 due to $1.18bn fair valuation losses on investment properties on the back of "capitalisation rates softening across the portfolio, compared to $926.0 million of fair valuation gains recognised in the prior year."
Global real estate headwinds such as China's Country Garden missing international bond repayments and US new commercial property loans by investor-driven lenders falling 60% in the second quarter from a year earlier.
Investors are bearish: Bank of America's latest Global Fund Manager Survey says investors are capitulating on their REIT positions at levels not seen since the Global Financial Crisis.
Source: Bank of America
