In fact, the three shares below are at 52-week highs today. Is it too late to invest?
The Citadel Group Ltd (ASX: CGL) share price reached a 52-week high of $9.13 on Thursday despite there being no news out of the leader in the development and delivery of managed technology solutions. Investors have been fighting to get hold of Citadel’s shares since the release of a strong full year result which saw revenue rise 9.8% to $108.5 million and net profit after tax increase 26% to $19.4 million. This growth was underpinned by record new contract wins and scalable cloud-enabled software sales. Despite its strong share price rise its shares are still only changing hands at 25x estimated forward earnings. I think this is good value for a company with such a positive long-term growth outlook.
The Over The Wire Holdings Ltd (ASX: OTW) share price rocketed to a 52-week high of $5.07 today. Investors have responded well to news that Over The Wire plans to acquire Access Digital Networks and Comlinx for $29 million. This will be funded by a $21.5 million institutional placement and a $5 million share purchase plan. The rest will be paid for in company shares. Management expects the acquisitions to be highly accretive to earnings in FY 2019 and FY 2020, pre-synergies. I like the telecommunications and IT service company and think it is worth taking a closer look at even after its stellar run.
The Vocus Group Ltd (ASX: VOC) share price raced to a 52-week high of $3.43. It wasn’t that long ago that the telco company’s shares were trading at a 52-week low, but news that Vodafone and TPG Telecom Ltd (ASX: TPM) plan to merge has been the catalyst for an incredible share price rally over the last couple of months. Investors have been betting that the price war is over in the home broadband market and see Vocus as a big winner. While I do think trading conditions will improve, I’m not willing to pay 20x estimated forward earnings to buy Vocus’ shares. I would class it as a hold now.
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Motley Fool contributor James Mickleboro owns shares of Galaxy Resources Limited. The Motley Fool Australia owns shares of and has recommended Vocus Communications Limited. The Motley Fool Australia owns shares of Citadel Group Ltd. The Motley Fool Australia has recommended TPG Telecom Limited. 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.