The rallying S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) sent a number of stocks higher on Friday with Sirtex Medical Limited (ASX: SRX), REA Group Limited (ASX: REA), Reject Shop Ltd (ASX: TRS) and Magellan Financial Group Ltd (ASX: MFG) all gaining around 4% or more.
The rally has caught some investors off-guard and has them questioning whether they need to be investing more to maximise their upside.
Sirtex’s share price has hit a new record high of $19 and comes in the wake of this week’s announcement by the company that dose sales of its targeted radiation therapy for liver cancer grew 27.1% during the fourth quarter. Sirtex continues to report outstanding results and has now posted 40 consecutive quarters of dose sales growth. So while its all-time high share price looks expensive, the superb growth of the company arguably justifies the current price.
REA’s shares are gaining ground again after getting the wobbles in the face of a reported “uprising” from real estate agents. With a new service partnership program announced at the start of the month it appears any issues have been smoothed over. As the leading online portal for real estate classifieds, REA has a commanding position that appears to be unshakeable.
Unlike Sirtex and REA, Reject Shop is far from riding high. The stock has been slammed in the past six months, having lost 44% of its price. It looks like the worst of the share price falls are now well and truly behind the discount retailer, with investors who picked the bottom already up 20%.
The recent weakness in global fund manager Magellan’s share price may have created a buying opportunity for investors who remain bullish on the outlook for equity markets in general and Magellan’s growth profile specifically. After reaching a high of $14.38 in April the stock’s price has fallen away to the mid-$11 range. Although the stock trades on a relatively high multiple this could well be justified given the group’s leverage to higher funds under management and its growth outlook.