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Why ARM Holdings plc, Meggitt plc, ITV plc, Redrow plc And Galliford Try plc Are All Soaring

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%.

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Alan Oscroft has no position in any shares mentioned. The Motley Fool UK has recommended ARM Holdings. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.