Commonwealth Bank of Australia (ASX: CBA) and Woodside Energy Group Ltd (ASX: WDS) shares have both been strong performers over the past year.
CBA shares closed Monday trading for $183.20 each, while Woodside stock ended the day changing hands for $34.15 a share.
This sees the CBA share price up 16.47% over 12 months, while Woodside shares have gained a whopping 72.04%.
For some context, the S&P/ASX 200 Index (ASX: XJO) is up 15.20% over this same period.
And the above outperformance doesn't include the two fully-franked dividends CBA and Woodside both paid out over the full year.
Woodside trades on a fully franked trailing dividend yield of 4.8%, while CBA shares trade on a fully-franked yield of 2.7%.
But after their recent strong runs, Shaw and Partners' Jed Richards believes now could be an opportune time for stockholders to take some profits off the table (courtesy of The Bull).
Image source: Getty Images
Have Woodside shares burned too bright?
"This energy giant has historically struggled to consistently meet market expectations," said Richards, who has a sell recommendation on Woodside shares. "While the current commodity environment has supported its share price, we see this as an opportunity to exit."
Among potential looming headwinds for the ASX 200 energy stock, Richards noted, "Capital intensity, project execution risk and long dated development timelines remain my concerns."
Richards concluded:
Investors may want to consider taking advantage of its recent valuation and improved sentiment. The shares rose from $23.59 on January 9 to $35.80 on April 7. The shares were trading at $33.37 on April 9. The shares are also responding to volatile crude oil prices resulting from the Middle East conflict.
Which brings us to…
Are CBA shares looking pricey?
Atop Woodside shares, Richards also recommends investors consider selling CBA shares.
"The CBA remains a high-quality banking operation, but its valuation is increasingly difficult to justify," he said. "The stock trades at a significant premium to global peers despite a mature domestic banking market and limited growth potential, in my view."
CBA trades at a price-to-earnings (P/E) ratio of just under 30 times.
Summarising his sell recommendation on CBA shares, Richards concluded:
While earnings remain stable, we see better value elsewhere in the sector. We believe the current share price leaves little margin for error, supporting a sell recommendation on valuation grounds. The shares have risen from $158.74 on February 10 to trade at $181.65 on April 9.
