It's the age-old question for investors – shares have risen so much this year, are they still an opportunity? Here's my take on what these big gainers have to offer today:
Mesoblast limited (ASX: MSB) – last traded at $2.62, up 4% in the past 12 months
Mesoblast has had a challenging 12 months with shares plunging after it became apparent that the company would need another capital injection (which it has since received). Shares have recovered from their lows of $1 as the company progresses towards regulatory approval for a number of promising products. The treatment for acute graft versus host disease (aGVHD) is currently on the regulatory fast track for approval, while another treatment for heart failure is in the phase 3 trial stage.
Mesoblast could be an opportunity for an investor that believes its treatments will be successful, however shareholders are paying a high price now in return for possible large growth in the future.
Challenger Ltd (ASX: CGF) – last traded at $12.72, up 56% in the past 12 months
Shares in Challenger have risen to a new all-time high after continued strong sales of the company's annuity products. This financial product business also has solid tailwinds over the long term, with Australia's ageing population and the ongoing debate about how many members of society will fund their retirement. Challenger remains vulnerable to a downturn or market crash, as it is essentially a kind of hybrid between a fund manager and an insurer, but appears fairly priced in light of its potential growth and track record of performance.
CSL Limited (ASX: CSL) – last traded at $126.30, up 27% in the past 12 months
CSL's shares have pretty much followed its profits over the past 12 months. Sceptics (including myself) felt that the company was probably overpriced at $115, given that it was growing at single digit rates. Shares were sliding over the last few months of 2016, before a profit upgrade announced in January saw them rocket higher again. As things are I'm still not keen on CSL at today's prices, although I do believe it is a high quality company and consider it a 'Hold' for the long term.
