10 Shares Trading Near An All-Time High

Published in Investing on 23 August 2012

Though these shares have never cost more, they still have the potential to move higher.

Whatever the economic backdrop, there will always be some shares that are storming ahead.

Despite market fears over the eurozone and the global economy, some companies' shares are posting new highs. Even better, these success stories are not limited to a narrow group of industries. When trawling the market to find these successful stocks, I found winners from a range of sectors from the FTSE 100 (UKX) to AIM.

Don't think just because these shares are near an all-time high that they cannot move significantly higher. Every winning share posts new highs along the way delivering massive returns.

Here are 10 winning shares that could be on their way to becoming all-time greats.

CompanyPriceP/EYield (%)% rise 12-monthsMarket cap
Compass Group (LSE: CPG)715p17.02.932.213470
Delcam (LSE: DLC)770p16.11.086.761
Diageo (LSE: DGE)1691p18.52.649.942272
Dialight (LSE: DIA)1091p26.41.149.4354
Intertek (LSE: ITRK)2760p22.01.449.24432
Iomart (LSE: IOM)163p23.00.766.3164
John Wood (LSE: WG)813p15.31.356.83026
Paddy Power (LSE: PAP)€52.921.82.257.22050
Prudential (LSE: PRU)797p11.63.335.520372
Wynnstay Group (LSE: WYN)405p11.92.119.167

Four shares stood out.

1) Delcam

Delcam are proving that a company can thrive as a supplier to the manufacturing sector. Delcam's specialist design software is used by manufacturers designing footwear to false teeth.

Delcam has done this with considerable success. In 1998, Delcam reported record sales of £13.7m. Turnover has since increased year-on-year to reach £41.9m for 2011.

This morning Delcam announced interim results. The company reported an increase of 15% in sales. This flowed through to a 77% rise in earnings per share (eps) and a massive 43% uplift in dividend.

The eps at Delcam is expect to increase 12.4% for 2012, to be followed by a 10.3% advance again in 2013. This means that the shares currently trade on 16.2 times the 2012 forecast. However, if the split in earnings between the first and second half in 2011 is matched in 2012, then there is the real possibility of a substantial upgrade in profit forecasts.

Delcam has proved its business model can thrive even in recessionary conditions. As such, it probably deserves a premium rating.

2) Diageo

Shares in top-brand brewer Diageo have frequently been trading at all-time highs. 1,000p in 2006. 1,140p in 2010. 1,400p in 2011. At the end of July this year, the shares breached 1,700p.

This morning, Diageo announced full-year results for 2012. These results again demonstrated the progress of the business that has supported the share price rises.

For 1998, Diageo paid shareholders 10.8p in dividends. This payout has since been increased every year, hitting 43.5p for 2012. In the last seven years, eps has increased from 62.0p to 94.2p. Diageo even managed to grow earnings and dividends through the financial crisis. Further eps growth is expected. The market is looking for an 11.8% rise for 2013.

Diageo reported strong growth in emerging markets. Of some concern, however, will be the 1% decline in sales volumes to European markets.

Some investors might think Diageo is priced for a fall. My belief is that the company's success has earned the shares a 'quality of earnings' premium. Unless Diageo's business suffers a significant decline, I would expect the shares to continue to look 'expensive'.

3) Iomart

The market has taken a shine to Iomart lately. In the last three months, shares in the data-hosting firm are up 27.3%.

This follows a strong set of final results announced in May. Iomart reported a 33% advance in revenues, a 96% increase in eps and a dividend hike of 38%. At the time, Iomart's chief executive, Angus MacSween, described data hosting as an industry that is still in its infancy. Mr MacSween expects the sector to grow significantly in the future and for Iomart to thrive in that growth.

With more services moving into 'the cloud' and data consumption ever increasing, it is hard to argue with Mr MacSween. The Iomart share price suggests that the investor community agrees. As with many smaller companies, Iomart shares could step back significantly in a broader market decline. Such an outcome could present canny investors with an opportunity to buy a company with fantastic prospects at a reasonable price.

4) John Wood

John Wood is a provider of engineering services to the power production and natural resources sector. Many companies in this sector have seen their share price suffer recently. However, John Wood shares are up 56.8% in the last 12 months.

The company's recent interim results suggest what has led the share price to soar. In the first six months of 2012, John Wood delivered a 36% rise in revenues. The eps increased 48% and the interim dividend lifted by 46%. Today, the market is expecting Wood to deliver $0.86 (54.4p) of eps for the full year.

John Wood also has an impressive dividend record. The shareholder payout has increased from $0.065 per share in 2006 to $0.15 per share in 2011. Analysts expect that the company will increase dividends by more than 10% per year for the next two years.

The market has rewarded John Wood's operating success with strong share price growth. If you are looking for a cheaper alternative in the sector then Hunting (LSE: HTG) might be worthy of further research. Hunting trades on 13.8 times the 2012 consensus forecast, falling to just 11.9 times expectations for 2013.

If you are looking for winning shares then you should check out what top fund manager Neil Woodford has been buying. His track record leaves other fund managers in the dust. Download the free Motley Fool report "8 Shares Held By Britain's Super Investor" if you want to learn from one of the best in the business. This report is 100% free and will be delivered to your inbox immediately.

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Further investment opportunities:

> David does not own shares in any of the above companies.

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