The following stocks – which are all members of the S&P/ASX 300 Index (Index: ^AXKO) (ASX: XKO) – have provided shareholders who have held each stock for a full 12 months, with solid investment outperformance against the index, with returns ranging from 26% to 82% excluding dividends.
These five stocks also happen to all be trading within a whisker of their 52-week share price highs, which can lead investors to ponder whether the run-up in share price means the best returns are now in the past or if there is still potential for above average performance as we head into 2014.
- Aurizon (ASX: AZJ), the Queensland-focused rail freight operator has seen its share price rise from $3.70 to $4.65 today.
- Fortescue Metals Group (ASX: FMG), the iron ore major that is still ramping up production has seen its share price rise from $4.21 to $5.59 today.
- Programmed Maintenance Services (ASX: PRG), which provides staffing, maintenance and project services to a range of industries, has seen its share price on an upward trend all year. Having traded at just under $2 per share 12 months ago, shares now trade near their 52-week high at $3.10.
- Transpacific Industries (ASX: TPI) owns the Cleanaway waste management business. The shares have been a roller-coaster ride in the past 12 months, bouncing from 70 cents to over $1, back towards 70 cents before reaching a 52-week high last month of $1.19.
Foolish takeaway
There are two essential questions that investors need to determine answers to when deciding the outlook for a company's stock price. Firstly, is the company overvalued, undervalued or about fair value? Secondly, what is the future outlook for the company's revenues and earnings?
A focus on share price movements will not provide these answers but rather a careful analysis of each company's intrinsic value and future prospects will. On the basis of valuation and outlook the above four companies have appealing attributes, which could help to sustain their share price growth in 2014 (although not necessarily at such a fast rate) and could make them worthy of investors' watch lists.
