Buying a stock at its highest price all year is always something of a gut-check for investors.
On one hand there is greater uncertainty around what price represents 'value', yet on the other hand good stocks will always hit new record prices as they deliver value to shareholders over the long term.
With this conundrum in mind, is there any value to be found at:
CV Check Ltd (ASX: CV1) – last traded at $0.70, up 233% for the year
CV Check listed at just the right time to ride the wave of positive sentiment that is buoying similar stocks like Reffind Ltd (ASX: RFN) and 1-Page Ltd (ASX: 1PG). Just as I wouldn't buy either of those stocks at today's prices, I find it hard to see value in CV Check, given that it has soared more than 200% in less than a month.
While generally the business model seems sound, the company has already received queries from the ASX and its price is clearly in the grip of speculative buyers. I do expect the price to rise higher in the near future however, as enthusiasm builds.
TPG Telecom Ltd (ASX: TPG) – last traded at $10.91, up 52% for the year
TPG Telecom really kicked off the current round of mergers and acquisitions in the telecom industry after its purchase of iiNet Limited earlier this year. While that news was enough to see the stock soar above $9 in March, recent announcements of a 15-year, $1 billion deal with Vodafone announced earlier this week saw TPG jump close to the $11 mark.
While there is ample room for upside to TPG's earnings, I feel that its price is reaching some kind of limit. The business already trades on a Price to Earnings (P/E) ratio of 38 and I doubt it can rise much higher in the near future.
Webjet Limited (ASX: WBJ) – last traded at $4.45, up 44% for the year
Webjet shareholders have experienced a rollercoaster year with the stock veering between highs of $4 and lows of $3. Recent announcements of a 41% growth in Total Transaction Value (a key driver of profits) and a preliminary final report indicating a 10% lift in Net Profit After Tax have pushed Webjet to its current price.
News that Flight Centre Travel Group Ltd (ASX: FLT) had lost market share earlier this year likely also played a part in Webjet's rise. However, the online travel industry is hugely competitive and while I believe Webjet can grow its profits, I would describe the stock as fairly valued at the moment.
