While some refuse to buy the stock at its 52-week high, many others see it as central to dynamic investing.
Optimists see this as an opportunity to enter, hoping that the 52 week high resistance will be broken through and bring more profits to come. The pessimists think the opposite.
When a stock’s price begins to approach its 52-week high, investors begin to wonder if they should buy more stocks given that this could continue momentum or sell off because the recovery could fail. ‘breathless.
With the help of Equitymaster’s powerful equity filter, we selected the best stocks that are approaching their 52 week high today.
This is an important indicator for many traders in making buying and selling decisions.
# 1 Pidilite Industries
The Pidilite Industries share price is the highest over 52 weeks of ??2,531.90 touched on October 19, 2021. It has a low rating of 52 weeks of ??1,646.75, affected last year on December 22, 2020.
Currently, the company’s shares are trading at ??2,433 levels, implying that they are only 4% of their 52 week high level.
Even amid the recent volatility, Pidilite has been able to cushion the blows in the course of its action. Why? Because market leaders tend to perform well even in times of volatility.
The company is one of the leading manufacturers of adhesives and sealants, construction chemicals, handicrafts, DIY products and polymer emulsions in India.
The company’s flagship brand, Fevicol, has become synonymous with adhesives to millions of people in India. It is also ranked among the most trusted brands in the country.
The market dominance of Pidilite with brands like Fevicol, M Seal, Dr Fixit, etc. is due to its quasi-monopoly status in the niche categories it operates with around 65% market share.
Recently, the company acquired a 19.5% stake in a startup – Pace Robotics, which works on interior plastering, painting and sealant of buildings. The startup is currently working on a prototype of a wall finishing robot.
Over the years, Pidilite has expanded its product portfolio. Key acquisitions of Pidilite over the past two decades include:
a) Ranipal in 1999
b) M-Seal and Dr Fixit in 2000
c) Steelgrip in 2002 and
d) Roff in 2005
Over the past year, the company’s shares have gained 41%.
# 2 Schaeffler India
Schaeffler India shares are currently trading at ??8,429. This is the peak of 52 weeks of ??8,588 arrived on Dec. 15, 2021. Stock is just 2% off a new 52-week high.
The course for Schaeffler India stocks has been good. A year ago they were trading near ??4000 levels. In just one year, the stock has almost doubled.
There are several reasons for this sharp increase. The first is that the auto component manufacturers participate in the rally with the auto manufacturers. Due to a rebound in auto sales, the outlook for the sector has improved.
Schaeffler India is one of the top three suppliers to many leading OEMs in India. When automakers are doing well, component manufacturers aren’t far behind.
Another reason behind the earnings may be the company’s increased focus on expanding its footprint. Very recently, it announced the establishment of a new manufacturing plant in which it will invest. ??3 billions.
Recent gains can be attributed to the company’s stock division plans. In October, Schaeffler India announced that it would consider a stock split.
It plans to become carbon neutral by 2040 and wants to use 100% renewable energy by 2024.
# 3 Tech Mahindra
After rising around 1% yesterday, Tech Mahindra shares are only 2% off their 52 week high.
Tech Mahindra had hit a 52-week high of ??1,674.90 last week, December 17th. He has a 52 week low rating of ??903 touched on December 22, 2020.
Recent gains can be attributed to collaborations she has made with a German company and in Vietnam.
The Computer Science major worked with TelefÃ³nica Germany to digitally transform its microwave network with an Open Software Defined Network (SDN).
At the same time, Tech Mahindra also announced a strategic collaboration with the SOVICO group, an investment group in Vietnam, to enable its digital transformation.
In a recent interview, Tech Mahindra CFO Milind Kulkarni said customers are ramping up their IT spending. However, hiring costs are on the rise and remain an industry-wide concern.
Over the past year, Tech Mahindra shares have risen 75%.
# 4 Gandhimathi Butterfly
Butterfly Gandhimathi stock price rose 3% yesterday to ??1,050, approaching its record price of 52 weeks of ??1,099.9 hit earlier this week on Monday.
He has a 52 week low rating of ??391.
Butterfly Gandhimathi is a small-cap company that manufactures LPG stoves, mixer grinders, tabletop wet grinders, and pressure cookers in stainless steel and aluminum, among others.
It is one of the largest kitchen appliance companies in India and a market leader in SS LPG stoves and tabletop wet grinders.
The company’s shares have grown dramatically over the past year, gaining around 125%.
The stellar performance of Butterfly Gandhimathi
Even this week’s volatility didn’t stop the stock from recovering further.
Well-known investor Dolly Khanna owns more than 1% of the company’s capital. She owns 212,639 shares in September 2021.
Even mutual funds are bullish on the stock. They have increased their participation over the past three quarters now.
# 5 La Opala RG
La Opala RG is one of the leading tableware (opal and glass) manufacturers and distributors in India. The company has around 50% market share in the organized opalware segment.
Yesterday, the company’s shares gained 2% to ??433.65. The Opala RG has a high rating over 52 weeks of ??450 affected earlier this month.
The share has a low price of 52 weeks of ??201, affected in April of this year.
Domestic mutual funds as well as foreign investors remain bullish on the title. In September 2021, they respectively held 14.1% and 6.1% of the company’s capital.
The stock has risen by around 95% over the past year, with most of the gains occurring in the past month.
Why can you ask? Companies making glass, in particular supplying vials for Covid-19 vaccines, are reaping the benefits of the ongoing global vaccination campaign.
In addition, the government imposed anti-dumping duties on Opal glassware imported from the United Arab Emirates (UAE) and China, 4% on the UAE and 30% on China. According to the notification, it will expire on August 8, 2022.
However, reports suggest the right will not expire and will continue. It’s positive for national players like La Opala RG.
What other stocks are nearing their 52 week high?
Apart from the above, here are other stocks that are trading near their 52 week highs.
Please note, the criteria mentioned in the screener can be modified according to your selection criteria.
This will help you identify and eliminate actions that do not meet your requirements and focus on actions that are well within the parameters.
Why the 52-Week High is such a Crucial …
As you’ve seen from the stocks above, companies that are trading near their 52-week highs have come out unscathed even in times of crisis.
These are well-run businesses that will have enough firepower to navigate in bad weather. They might even be able to do better when the tide turns while the others are healing their wounds.
On the flip side, stocks that are trading near their 52 week lows are the ones facing multiple problems. For example, defaults, rating downgrades, management issues, etc.
If a stock is trading at 52 week lows or highs, there is likely a reason behind it.
An important point to note here is that a 52 week high is not the only indicator to consider.
Investing isn’t as easy as picking stocks at 52 week highs and avoiding stocks at 52 week lows.
However, there is a good chance that the group of stocks trading near their 52 week highs have a better chance of doing well compared to the other.
In conclusion, rather than focusing more on price action, your ultimate goal should be fundamentals and valuations.
Disclaimer: This article is for informational purposes only. This is not a stock market recommendation and should not be treated as such.
This article is syndicated from Equitymaster.com
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