It certainly has been a topsy-turvy few days for the ASX. In between the Greece worries and the Chinese sharemarket crash, there's been plenty of ups and downs.
Lately the market has decided that the predominant direction should be UP, with positive benefits for a lot of stocks. Only a handful have reached new heights however, and here's why:
Blackmores Limited (ASX: BKL) – last traded at $82.99, up 198% for the year
Blackmores returns once again to the 52-week highs list as the stock reached a new high of $83 in trade yesterday afternoon. The vitamin and supplement supplier has delivered breathtaking performance in recent times, and with its expansion in Asia the company has a lot going for it.
However, as contributor John Hopkins noted in his article "One big reason to invest in Blackmores", the stock currently trades on a Price to Earnings (P/E) of 40, which looks expensive given that a number of – albeit less well known – growth stocks are delivering comparable performance from P/Es of 30 or less.
I believe that Blackmores is a 'Hold' at today's prices.
1-Page Ltd (ASX: 1PG) – last traded at $2.49, up 678% for the year
Hiring firm 1-Page has jumped on a number of positive announcements this year, including most recently the signing of two US Fortune 500 companies to its 'Sourcing Platform'.
The major appeal of 1-Page is its ability to cut down hiring times from 13 weeks to 4 weeks and reduce the amount of resources required to hire by pre-screening and filtering applicants. When you're talking about a company with over 70,000 employees (like one recent signing), the benefits are obvious.
Large firms tend to have a lot of inertia that precludes innovation and I think 1-Page has the kind of pitch that large firms will find very attractive. Its potential market is massive and initial signs appear promising, but 1-Page is as yet unprofitable.
The company is difficult to value, but I'd say 1-Page is worthy of a closer look.
Exchange Traded Funds – up between 20-50%, if not more
Exchange Traded Funds, or ETFs, are low-cost funds that invest in a given market or sector. Generally speaking, they aim to match the returns from a given sector and you can find one to suit just about any investor. There are ETFs for commodities, healthcare stocks, currencies, foreign markets, the global stock-market, emerging markets, you name it.
A whole bunch of ETFs including the ISGLOTEL CDI 1:1 (ASX: IXP) (Global Telecom stocks), ISCS&P500 CDI 1:1 (ASX: IVV) (the US S&P 500 index) and ISGLHLTCA CDI 1:1 (ASX: IXJ) (Global healthcare stocks) have all hit 52-week highs this week.
Some, like telecom and healthcare, have good long-term tailwinds but on the whole they all look expensive. Since ETFs generally map the biggest companies (which are more mature and thus generally have lower returns) I'm not a fan of buying in when prices are at their peak. After a crash or during times of average prices is when to get into these stocks.
