3 superstar stocks hitting 52-week highs

Can these companies gain further from here?

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Over the past week, the S&P/ASX 200 Index (INDEX: ^AXJO) (ASX: XJO) closed essentially flat, at 5,490.8, rising just 0.25% with early falls being recouped.

Several stocks have hit new 52-week highs, suggesting either there is more on the way, or perhaps, they may be overpriced.

Here are three large cap, blue-chip stocks hitting new highs last week.

Commonwealth Bank of Australia (ASX: CBA)

Australia’s largest and possibly best bank hit a new high of $81.37, up slightly from last month’s high of 79.95. We have long argued that the bank is overpriced, and two fund managers recently agreed with us. Matt Williams, head of equities at Perpetual investments and Crispin Murray, BT Investment Management’s head of equity strategies have both noted they are underweight Commonwealth Bank, as more than 80% of the bank’s earnings growth is coming from falling bad debts, which are at historic lows. That’s rather than growth coming from rising revenues, and appears unsustainable.

Challenger Ltd (ASX: CGF)

Diversified financial services company, Challenger Ltd saw its shares hit a new 52-week high of $7.43, well above last month’s high of $7.06. Currently trading on a prospective P/E ratio of just 11.7 for this financial year, and paying a fully franked dividend yield of 3.1%, Challenger still looks to be good value.

Telstra Corporation Ltd (ASX: TLS)

Telstra Corporation Ltd’s shares traded as high as $5.40 last week, possibly on news that the company was going to roll out a national wi-fi network – as we discussed in this article. In recent times the telco has divested some of its non-core and non-performing assets like Sensis and Hong Kong mobile operator CSL, amassing a billion-dollar war chest that could be returned to shareholders, or used on acquisitions. Even at these prices, Telstra looks interesting.

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Motley Fool writer/analyst Mike King owns shares in Telstra Corporation. You can follow Mike on Twitter @TMFKinga

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