The December market correction is still fresh on the minds of most investors, but the good news is that 2019 has gotten off to a strong start and a lof of the December losses have already been erased.
Expect a lot of market volatility over the course of the next few months as rising interest rates, trade negotiations between the U.S. and China, and slowing corporate earnings growth continue to cast doubt on the bull market.
While most stocks have erased a significant amount of their December losses, others have yet to find support, and others have managed to completely erase any recent selling and are back to all-time or new 52-week highs.
The stocks trading at new highs are the ones we want to focus on today. Stocks that have managed to show strength in a rocky market are attractive because they likely offer the best protection against another big drop in the market should we see another correction in the months ahead.
Here are five stocks that are hitting new highs in today's market.
Starbucks (SBUX) has trended steadily higher since last summer. The stock did trade slightly lower with the overall market correction in December, but has already recovered the December losses and is now trading at a new all-time high. The stock's run up has lifted its forward P/E to 23, which is a bit high for the company, but with earnings expected to rise 12.2% per annum over the next five years the valuation will definitely not prevent shares from building on recent gains.
The company reported a fabulous quarterly report on January 24 which topped estimates on both the top and bottom line and pushed shares higher. Earnings were up 29% year over while sales rose 8.7%. The stock is at $70.43 with an average price target of $66.57, but following the recent quarterly report analysts are likely to start lifting their targets.
Procter & Gamble (PG)
Consumer goods maker Procter & Gamble (PG) hit a new all-time high today of $98.64. PG started moving higher last May, and despite a small sell off in December along with the overall market has steadily moved higher. The company has posted three straight earnings beats, the most recent in January with profits up 5% year over year.
PG trades with a forward P/E of 20.6, which is a little high given the company is expected to show annual earnings growth of just 6.9% over the next five years. Analysts have a $96.54 price target on the stock which could keep shares from moving too much higher unless the recent earnings beat leads to some higher targets from the analysts that cover the stock.
Auto parts retailer AutoZone (AZO) hit a new all-time higher today of $899.95. The stock has moved steadily higher since last April, and for the most part avoided the December market correction. The company has yet to report earnings this cycle and is not scheduled to release its fiscal second-quarter numbers until March 5. The company is forecast to report earnings of $9.98 per share, basically in-line with the $10.00 it reported during the same period last year.
AutoZone has posted positive earnings surprises the last three quarters, so it could easily post year over year earnings growth that would help drive the stock even higher. Despite trading at an all-time high, AZO remains favorably priced with a forward P/E of just 14.1, with earnings forecast to rise 11% per annum over the next five years. Analysts see continued upside in the stock with an average price target of $923.18.
Chipotle Mexican Grill (CMG)
Mexican fast food chain Chipotle Mexican Grill (CMG) was one of the market's strongest stocks before a string of E. coli outbreaks occurred at the company's restaurants in 2015. It took a long time for the company to regain consumer confidence and it took close to three years before the stock was able to begin to recover. The stock began to recover in February 2018 on the heels of a surprising earnings beat, and the company has topped estimates each quarter since with a huge earnings beat on February 6 with earnings of $1.72 versus the consensus $1.31. The latest earnings beat shot the stock higher and it hit a new 52-week high today of $612.60, which is up 144% from its 52-week low.
The company is expected to grow earnings by 27% per annum over the next five years which should keep strength under the stock, but the company has to hit its estimates or will face a lot of selling pressure because the stock is currently priced for perfection with a forward P/E of 50. Analysts who cover the stock have an average price target of $923.18.
Navigation device maker Garmin (GRMN) hit a new 52-week high of $71.08 in today's action. The company has a fantastic earnings track record, having posted better than expected numbers on the top and bottom line in each of the last 12 quarters. Garmin will next report on February 20, with the consensus calling for a profit of 79 cents per share, but the street is looking for another earnings beat with a whisper number of 83 cents.
The company has shown modest earnings growth of 3.9% per annum over the last five years, but that is expected to tick up a bit over the next five years with analysts forecasting average annual earnings growth of 7%. If the company is able to continue to show big positive earnings surprises the future estimate could be greatly understated and with a forward P/E of 20 there is certainly upside potential. If the company is able to top estimates on the 20th, as expected, look for GRMN to continue setting new 52-week highs. Analysts have an average price target of $68.75 on the stock, but those estimates will likely be revised higher should Garmin post the earnings beat the market expects.