15 Shares Trading Near 52-Week Highs

Published in Investing on 3 September 2012

These shares are all trading within 3% of their high for the year. Could they go higher still?

It seems that whatever the economic backdrop, some shares will always be faring well.

The eurozone crisis and the UK recession are two of investors' biggest worries. Despite those concerns, these companies are trading within 3% of their highest price of the last year.

I trawled the market to find the 15 largest companies trading near their 52-week high. Have these shares peaked, or do their prospects mean that their could be further gains to come?

CompanyPrice(p)Yield %P/EMarket cap (£m)
Diageo (LSE: DGE)17302.517.543,251
Centrica (LSE: CNA)3274.812.416,981
Compass (LSE: CPG)7092.819.013,272
British Sky Broadcasting (LSE: BSY)7613.314.012,741
Associated British Foods (LSE: ABF)13201.919.110,512
Experian (LSE: EXPN)10002.024.310,086
Aggreko (LSE: AGK)23600.922.46,330
J Sainsbury (LSE: SBRY)3274.911.66,176
Smith & Nephew (LSE: SN)6672.014.25,991
Next (LSE: NXT)35802.514.35,895
Johnson Matthey (LSE: JMAT)24002.415.64,922
British Land (LSE: BLND)5404.810.04,798
RSA Insurance (LSE: RSA)1148.113.34,047
Whitbread (LSE: WTB)21302.417.23,792
Babcock International (LSE: BAB)9372.420.63,367

Four shares stood out.

1) Sainsbury's

Shares in Sainsbury's are up 10.2% this year. This is a far superior performance to Tesco (LSE: TSCO) (-10.3%) and Morrisons (LSE: MRW) (-4.1%) in the last year.

According to the Kantar Worldpanel survey, Sainsbury's managed to increase its share of the UK grocery market. Sainsbury's growth in the last 12 months outpaced its three big rivals Tesco, Morrison's and Asda.

Sainsbury's clear progress will have helped reassure the market of its future profitability.

Sainsbury's is expected to deliver a slight increase in earnings for 2013. This puts the shares on 11.3 times the 2013 consensus estimate. The shares are expected to yield 5.0% for the year. By both measures, Sainsbury's is cheaper than most of its FTSE 100 (UKX) peers. Although the shares are already up significantly this year, Sainsbury's growth is encouraging and the dividend is respectable.

2) Whitbread

Perhaps when you hear the name Whitbread you think 'brewer'. However, Whitbread is today a hotels and leisure business.

Since selling its beer company in 2000, most of Whitbread's revenues are derived from its hotels and coffeee businesses: Premier Inn and Costa Coffee.

Of total revenues for 2012 of £1.8bn, £756m was delivered by Premier Inn and £542m by Costa. The balance comes from Whitbread's restaurants businesses such as Beefeater and Taybarns.

While this sort of discretionary spend might be expected to collapse in a recession, Whitbread has been thriving. In the five years since 2007, sales are up 51.4%. This progress has flowed through to the bottom line and shareholders' pockets. In those five years, earnings per share (eps) has risen from 44.1p to 124p. The dividend has increased in each of the last five years from 30.3p to 51.3p.

Although the shares currently trade at an all-time high, they do not yet appear overpriced. Another two years of double-digit profit growth is expected. Whitbread shares trade on 14.6 times 2013 consensus estimates, falling to 13.2 times the 2014 number.

3) RSA Insurance

RSA frequently crops up in market trawls due to its high market capitalisation and massive dividend. For the last 12 months, RSA shares have fallen in the expectation that the dividend would be cut. This has not happened. RSA's dividend was even increased 2% at the interim stage. The shares are up 16.7% in the last three months to their highest price since late March.

This means that RSA shares trade on 9.6 times the consensus eps forecast for 2012. With a forecast dividend of 9.4p, the shares come with an expected yield of 8.2%. While dividend cover may look thin, eps is expected to rise 14.5% in 2013.

Helping underpin the RSA share price is the company's net asset value. At the interim stage, this was reported as 102p per share. In the last five years, the RSA share price has spent approximately three weeks trading below 100p. All the while, the company has never cut its dividend. RSA looks like the outstanding blue-chip, high-income share on the market today.

4) Babcock International

Babcock International is another company whose shares are trading at an all-time high.

In July, the company issued a trading statement saying that management expects to meet their expectations for the financial year. Perhaps surprisingly, Babcock explained that the current economic climate actually works to the company's favour as more firms look to outsource labour and expertise.

Analysts expect Babcock to deliver a massive 52.3% increase in eps in 2013. With five months of the 2013 year gone, it looks as though the investment community is starting to believe in the analysts' forecasts.

Babcock's dividend has increased year-on-year since 1998. Another two years of above-inflation dividend growth are expected. While the current yield may be less than average, this is a result of the considerable share price growth in the last two years. Babcock are not stingy payers: for the last five years, the payout has increased at an average of 23.0% per annum.

Just because these shares have performed well, this does not mean that they will continue to rise. Stock-markets are forward-looking. If investors decide that their prospects have changed then share prices could move downwards. To understand how investment markets work, download The Motley Fool's free report "What Every New Investor Needs To Know" . This report is 100% free and will be delivered immediately to your inbox.

David Kuo challenged his Motley Fool analysts to pinpoint the attractive sectors of 2012 -- and they delivered! Discover the industries they selected in this new Motley Fool guide -- "Top Sectors Of 2012"-- while it's still free!

Further investment opportunities:

> David does not own shares in any of the above companies. The Motley Fool owns shares in Smith & Nephew.

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