The S&P/ASX 200 Index (ASX: XJO) (Index: ^AXJO) has been holding up alright over the past week, despite Chinese GDP figures showing a slight decrease and oil prices hanging low.
That hasn't stopped some stocks from driving upward and setting new records though. Here are two of those companies making new highs this past week. One I think has a developing growth story that is still compelling at these higher prices. The other has interesting opportunities, yet investors may do better with a larger margin of safety.
1) Market momentum in Telstra Corporation Ltd (ASX: TLS) shares pushed the stock up to a new multi-year of $6.29 at the start of this week. Now that the negotiations for the handing over of the telco's physical line copper network with the government and the National Broadband Network Company were concluded in December satisfactorily, more focus can be put on Telstra's ambitious overseas expansion plan.
It's creating joint ventures and working relationships with Asian telecom and data management companies to build a bridge into South East Asian mobile, business enterprise solutions and data centre markets.
It is also building up important network infrastructure through its recent acquisition of Pacnet, a company that owns an extensive network of submarine telecommunications cabling and 29 interconnected data centres around the Asia-Pacific.
The telco giant's stock story is improving. While that is still the case, it pays to stick with the company. Earnings growth may be slow over the next few years as these recent developments bear fruit. Patient investors can at least look forward to a rock-solid 4.7% yield fully franked.
2) Another stock to watch is Sydney Airport Holdings Ltd (ASX: SYD). The owner and operator of the Sydney Airport has been moving up in share price pretty much in a straight line since mid-2011. The stock has doubled in that time and set a new all-time high of $5.02 on Wednesday.
The company has a great competitive advantage by owning the only international airport in Sydney. A weaker Aussie dollar means that more international visitors, especially Chinese tourists, are forecast to come to Australia. Chinese airline companies could also increase Sydney flights, generating more terminal usage fees for Sydney Airport.
The big kicker for this stock is development plans are being worked out for a new airport in the Sydney region to handle future air travel growth. Sydney Airport Holdings has the first rights to do the development if it wants to take the project on. That would help protect its monopoly-like hold on market share and potentially increase earnings over the long term.
A good opportunity for dividend income with a 4.6% yield, but the stock currently trades at 50 times earnings. I would prefer to wait for a better price entry point.
