Can March’s Winners Glencore PLC (+14%), Tullow Oil plc (+18%) & Dialight Plc (+32%) Keep Charging?

Today I running the rule over three stock market marchers.

A bit dim?

Shares in Dialight (LSE: DIA) have exploded by almost a third in March, with the stock still chugging higher during the course of post-Easter trading.

Dialight announced earlier this month that it had printed a pre-tax loss of £3.9m during 2015, swinging from a profit of £15.5m the prior year. The LED lightning manufacturer advised that “a downturn across a number of our markets exacerbated operating challenges.

 Still, the market has cheered Dialight’s plans to tackle these problems through aggressive restructuring that kicked off during the second half, including plant closures and a streamlining of operational processes.

The number crunchers expect these measures to produce a 31% earnings bounce in 2016, resulting in a heady P/E rating of 28.6 times. But this number topples to 17.1 times for next year thanks to expectations of an extra 90% earnings bump.

However, it could be argued that Dialight remains too expensive given that prolonged trading difficulties look to be on the cards. I reckon the business could suffer a significant share price re-rating as a result.

Risks outstrip possible rewards?

A recovery in commodity prices has sent investor appetite for minerals and energy stocks spiralling higher in recent weeks.

Diversified giant Glencore (LSE: GLEN) and fossil fuel play Tullow Oil (LSE: TLW) have both seen their stocks values appreciate by double-digit percentages since the start of March. But share values have moderated, as fear has once again gripped the market — indeed, the firms were both dealing lower in Tuesday business.

And I believe more but prweakness can be expected in the coming days. Further swathes of poor data from raw materials glutton China has accelerated fears of a sudden collapse in commodities demand, concerns which could gain traction when the next Chinese manufacturing PMI  survey is released on Thursday, March 31st.

As well, sentiment towards the oil segment is becoming increasingly twitchy as hopes of a supply cap by certain OPEC members and Russia evaporate. Cartel members Iran and Libya have already poured scorn on a possible output freeze, leaving already-bloated inventories in danger of exploding.

Allied to concerns over deteriorating supply imbalances, a resurgent US dollar has also heaped further pressure on the commodities sector. Positive data from the United States in recent days has provided a double-whammy, boosting market appetite for the world’s reserve currency as well as raising the prospect of another Federal Reserve rate hike in the not-too-distant future.

The City expects Glencore to return to the black this year, although projected earnings of 5.3 US cents per share result in a massive P/E ratio of 49.1 times. And predicted earnings of 5.7 cents at Tullow Oil creates an earnings multiple of 49.2 times.

I believe that these readings are far too heady given the huge risks associated with commodities markets at present, and therefore both Glencore and Tullow Oil are in danger of a severe correction should economic data keep on disappointing.

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