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Why Beach Energy Ltd and Saracen Mineral Holdings Limited shares are at 52-week highs

Modest gains on the Australian share market this week have been due, in part, to gains in the energy sector, while sectors like healthcare and retail have logged falls.

These three resources shares are riding the highs by booking 52-week share price records this week as the ASX Ltd (ASX: ASX) itself sits at its own 12-month high with a close of $59.85 on May 1 up 16% from $51.49 at this time last year.

Beach Energy Ltd (ASX: BPT)

Shares in oil and gas exploration and production company Beach Energy hit a 52-week high on May 1 with a closing price of $1.61 – up from just 71c per share at this time last year.

All eyes have been on Beach since the release of its March quarter results detailed the consolidation of Beach’s Lattice Energy acquisition, with Citi retaining a sell rating on the stock with a reduction of its price target to $1.14.

Citi says the March report was “softer” than expected.

The March quarter results showed large increases in production and sales for Beach and investors have responded well so far – in line with steady gains in Beach’s share price over the last 18 months.

Brokers have been tough on energy players of late with Morgans rating oil and gas player Woodside Petroleum Limited (ASX: WPL) as a hold and reducing its price target from $30.99 to $30.69, despite first-quarter results showing a rise in LNG output and production forecast increases.

Saracen Mineral Holdings Limited (ASX: SAR)

Shares in mineral exploration and development company with a focus on gold Saracen Mineral Holdings Limited have been on a year-long upswing to land at a 52-week high on May 1, with its share price down slightly to $1.92 at the time of writing.

Saracen recently outlined its growth plans for the next seven years, which will see it produce 350,000 ounces of gold from its Carosue Dam and Thunderbox assets.

The company certainly appears to have a positive medium-term future and is beginning to match up nicely to gold producing peers Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL).

A corporate presentation by Saracen yesterday detailed increases in FY18 production guidance, cash flow increase expectations to maximise shareholder value, and a production outlook driven by reserve growth.

One to watch as its current drilling projects gain momentum.

Silver Lake Resources Limited (ASX: SLR)

Shares in gold exploration small cap Silver Lake Resources Limited reached a 52-week high this week with prices up 1.2% to 57c per share at the time of writing.

Silver Lake is an emerging player in the resource sector that it would pay to keep on your watch list with a production update in April outlining an increase in sales, production output, and FY18 guidance.

Silver Lake’s shares bottomed out to a 52-week low back in December 2017 after investors were unimpressed by FY17 results with a net profit of just $2 million from revenue of $227.5 million.

But investor sentiment has certainly improved for Silver Lake since then and its March quarter results were much more favourable with the no debt company’s robust balance sheet showing $87 million in cash and bullion alongside a strong focus on cost controls as production strategies are rolled out.

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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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