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Woodside, Suncorp Group Ltd, Transurban Group hitting new highs: Is it too late to buy?

Within the last month three big name stocks have hit 52-week highs, which is a good sign when we’re between reporting seasons and the S&P ASX All Ordinaries Index (ASX: ^AORD) is close to setting a new yearly high itself. However, investors may be asking themselves how much more the stocks can climb and whether they’ve already missed the boat. We naturally prefer to buy shares when they’re priced low.

Multi-billionaire investor Warren Buffett once said-

The market is there only as a reference point to see if anybody is offering to do anything foolish. When we invest in stocks, we invest in businesses. 

We should always be concerned about getting good value for investments. A good sell-off may give a buying opportunity for quality stocks, yet we shouldn’t be scared off by a new high or rising prices if the business behind the stock is growing and thriving. Here are three stocks that I believe have more to run and would recommend as good income and growth companies over the long term.

1) Woodside Petroleum Limited (ASX: WPL)

The $34.4 billion oil and gas producer has a strong earnings growth trend since 2009. It hit a high of $43.05 in mid-June and has pulled back a little to about $42. It has a multi-billion dollar war chest for new acquisitions and steady income streams from its LNG projects offshore near WA. What’s remarkable is the 5.6% dividend yield that income-hunting investors would really like. This is definitely a long-term grower that would fit well in your portfolio.

2) Suncorp Group Ltd (ASX: SUN)

Well known for its insurance and banking services, the company is turning around after several years of higher claim volumes due to abnormally high levels of natural disaster damage. The stock just hit a high of $13.78. Its current business simplification program is forecast to create cost savings of about $265 million by FY 2016. The business is improving and potentially better earnings can mean higher share prices in the future. In the meantime, you can take advantage of the fully franked 5.0% yield as you watch it grow in your portfolio.

3) Transurban Group (ASX: TCL)

Already having a number of major toll roads and tunnels in Melbourne and Sydney, the infrastructure developer, operator and manager has just won the bidding for a portfolio that contains five of the six toll roads and tunnels in Brisbane. Toll income streams can go on for decades, which helps support shareholder distributions and future acquisitions. It hit a high of $7.82 last week and is $7.63 now with a 39 price/earnings ratio. I really like the business and think it will grow over the next five years. However, with such a high PE, I believe it would be best to hold off on the stock until the market offers a more foolish price similar to Buffett’s quote above.

2 top ASX shares Warren Buffett would love...

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Motley Fool contributor Darryl Daté-Shappard does not own shares in any company mentioned. 

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