Seeking Alpha
Long/short equity, long only, short only, growth
Profile| Send Message|
( followers)  

On Tuesday, we saw a market rally thanks to optimism over Europe and a beginning to 2012 trading after a flat 2011. Wednesday, markets were mixed, but several names have hit 52-week highs in the past two days. However, just because they are at these highs doesn't mean you can't buy them. Of course, you may want to wait for a pullback to get a better price, but here are the seven names I like that either hit or were just off 52-week highs during Tuesday's trading.

Intuitive Surgical (ISRG): Shares of the surgical robot maker continue to make new highs. Intuitive was one of the best performing stocks of 2011, and continues to be a favorite of many investors. The stock has been known in recent years for its blowouts of earnings expectations, which usually lead to large rises the day after earnings. Some may say it's expensive, but the forward P/E of 33 is right at the midpoint of its 3-year P/E average, and a trailing P/E of 40 is not uncommon. The high P/E point of the year average over the past five years is 60, so there is still the possibility that this name can go even higher. I think the company can do $15 of earnings in 2012, and if you continue the 40 P/E valuation, you get a price target of $600.

Mcdonald's (MCD): Shares of the fast food retailer opened at a new 52-week high on Tuesday, but drifted lower throughout the day as profit taking seemed to take place. I like the name as a top pick in its industry, and the 2.8% yield plus continuing buybacks add more reasons to buy. The stock has pulled back below $100 after reaching triple digits multiple times in the past week or so, but it keeps getting back to new highs. If this name drops back into the low or mid $90s, it's definitely a steal.

Visa (V): Shares of the credit card company came within pennies of a 52-week high on Tuesday, and I think gains are likely to continue. In my 2012 predictions list, I stated that this name can return 25% this year, and I believe that. Banks keep trying to push debit card fees, and a return to credit cards seems likely if that's the case. Increased rewards programs will only increase credit card usage, and I think this name (and entire sector) is a great one to be in. Visa does pay a small dividend, but I'm buying this name for continued growth.

Chipotle Mexican Grill (CMG): Shares of the fast food casual restaurant company hit $350 for the first time on Tuesday, and Jim Cramer thinks this name is headed to $390. I don't always agree with Cramer, but I think he's right on this one. Bears say that the same-store sales numbers aren't doing well, but the company is making up for that by opening plenty of new locations. We are still expected to see 20% revenue growth in 2012, and earnings are projected to grow at an even faster rate. After the next earnings report and subsequent price target hikes, this name goes higher. I don't think it's out of the question to see this name above $400 in 2012.

Google (GOOG): I had been cautioning investors on Google for months to wait on the name until it broke through the $625 level, and once it did, it took off. Google traded above $650 for the first time in years on Tuesday, and that sent the stock all the way up to $670 during Wednesday's trading. We are now seeing more analysts raise their price targets into the high $700s, and I think it's finally time for this stock to break out of its two year range. A split would really boost interest for shares, but I don't think the company is planning on one anytime soon. Barring a drop in the markets, I think this name could easily hit $700 in the next few weeks.

Celgene (CELG): Shares of the biotech firm hit a new high on Tuesday, and are closing in on $70. Celgene has always been one of my favorite names in the sector, primarily because it has profits, something a lot of biotechs do not. Celgene was projected to have a big 2011, with 30 plus percent growth in revenues. While there is still growth in the future, it won't be at that rate, but it is still coming. Celgene does have a higher valuation than some of its larger competitors, but when you throw in the growth numbers, the price to growth valuation is quite attractive. Buy on any pullbacks.

Verizon (VZ): Verizon is the only true value name on my list (I don't see Mcdonald's as a 100% value play), and I still like it, even as it trades near $40. The company boasts a 5% dividend, and that's why I want to be in the name. The dividend is solid and continues to grow, and the future of it should not be in question. I think Verizon is in the best shape of any of the big phone names, and has positioned itself well to reap the rewards of Apple's AAPL dominance. A new IPad in 2012 should continue to help Verizon, and troubles at its competitors leave it as my top pick in the space.



Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 7 Names You Can Still Buy At 52-Week Highs