It’s nice when the daily number of new 52-week highs regularly outstrips the new lows, and we’ve had some cracking runs across a number of sectors of late.
At a price of around 810p in October, ARM Holdings (LSE: ARM) shares were uncharacteristically undervalued. The price represented a P/E of under 45 based on eventual 2014 earnings figure, and that might look high to some — but it was the lowest valuation ARM shares have been on since 2010. Since then the price has gained 38% to a new 52-week high of 1,115p on Friday, as confidence in ARM’s future growth prospects has been returning.
Meggitt (LSE: MGGT) has been enjoying the recent resurgence in aerospace and defence shares, and its shares have soared by 36% since October to a 52-week high of 578p. Over 12 months that’s a rise of a relatively modest 10%, but it is in anticipation of 2014 results due on 24 February. The City is expecting a 16% drop in EPS, but it should be followed by a return to growth this year.
ITV (LSE: ITV) has had a very strong five years with a 332% rise, and also reached a 52-week high on Friday, of 235p. Adam Crozier’s arrival as CEO in 2010 heralded a new approach to creating quality TV output, and the economic recovery has greatly helped with the firm’s advertising revenue. Even after that rise, we still only see a forecast P/E of 14.8 for 2016 with more strong EPS growth on the cards.
Shares in Redrow (LSE: RDW) hit a high of 367.8p on Thursday, boosted by a big surge on 11 February when the housebuilder reported expectations-busting first-half results. With revenue up 54%, pre-tax profit was up 92% and EPS up 93% — and the interim dividend was doubled. The housebuilding sector has recovered very strongly in recent years, but even after the recent move, Redrow shares are still on a forward P/E of only around nine, and that looks very cheap to me.
Galliford Try (LSE: GFRD) has shared in the housebuilding boom, with its shares hitting a high of 1,469p on Wednesday for a 350% rise over five years. First-half results on the day helped, with a 35% rise in revenue leading to a 14% increase in EPS and a 47% bump in the interim dividend. We’re looking at relatively low P/E valuations, of 13.5 for the full year to June followed by 11.2 next year — not as low as some, but not high for a share expected to yield dividends of 4.6% to 5.4%.
