Investors use different methods to hunt for stock ideas.
Some may rummage through the bargain bin to look for cheap, undervalued stocks.
Others may study the list of stocks hitting their 52-week lows to uncover battered companies.
Another method that I find useful is to study the list of companies that are hitting their year-high.
It may sound unconventional.
But there must be a reason for investors to feel optimistic about such businesses.
It could be due to their strong business model that allows them to adapt to the current tough conditions.
Some may be latching on to long-term trends that will endure even after the crisis has passed.
These resilient companies have what it takes to continue growing even through challenging times.
Here are five companies that are trading close to their 52-week highs that you may want to include in your watchlist.
Venture Corporation (SGX: V03)
Venture Corporation is a global provider of technology products, services and solutions.
The group manages a portfolio of more than 5,000 products and employs over 12,000 people worldwide.
Venture is currently trading around S$20.39, just 3.9% off its 52-week high of S$21.21 achieved in October last year.
For its full-year 2020 earnings, Venture reported a 17.1% year on year decline in revenue as supply chains were impacted by the pandemic.
Net profit after tax fell 18.2% year on year to S$294.7 million.
Despite the weaker results, the group remains sanguine about its prospects.
It intends to seek growth in the life sciences, medical devices and artificial intelligence sectors while looking for new opportunities in the battery electric vehicle industry.
The group announced a full-year dividend of S$0.75, up from the S$0.70 paid out last year.
DBS Group Holdings Ltd (SGX: D05)
DBS is one of Singapore’s three major local banks.
The group offers a comprehensive range of banking and investment services for individuals and corporations.
Its shares are trading at S$28.30, just 2.5% shy of its 52-week high of S$29.02 on 9 March this year.
Throughout the crisis, the bank has maintained a disciplined stance in reining in expenses and maintaining a strong balance sheet.
For its full-year 2020 earnings, revenue remained flat year on year despite the tough economic conditions, while profit before allowances inched up 2% year on year to S$8.4 billion.
CEO Piyush Gupta sounded an optimistic tone when he said that asset quality trends are encouraging and that if the current scenario holds, severe stress is unlikely to materialise.
DBS also recently announced the acquisition of Lakshmi Vilas Bank in India to expand its Indian franchise and customer base as a further avenue for growth.
Starbucks (NASDAQ: SBUX)
Starbucks runs a chain of 33,000 coffee outlets around the world offering a wide variety of beverages and food items.
The company’s share price recently closed at US$104.97, around 6.6% off its 52-week high of US$112.34.
For its fiscal 2021 first quarter ended 27 December 2020, net revenue declined by 5% year on year to US$6.7 billion, while comparable-store sales fell by 5% as well.
Net profit plunged by 30% year on year to US$622 million, largely due to the effects of COVID-19.
Starbucks had, however, opened 278 net new stores during the quarter, while its Starbucks Rewards loyalty program 90-day active members in the US rose 15% year on year to 21.8 million.
In 2022, Starbucks will open its coffee innovation park in China, taking the company one step further on its journey to becoming resource positive.
Haw Par Corporation Ltd (SGX: H02)
Haw Par is a conglomerate with four divisions: healthcare, property, leisure and investments.
The company’s healthcare products division, represented by world-renowned brand Tiger Balm, generated the lion’s share of the revenue for the group in 2020.
Its shares are trading around S$13.11, just 1.7% off its 52-week high of S$13.34.
The group’s share price has recovered strongly from its lows despite it reporting a 54.5% year on year plunge in revenue.
Net profit decreased by 34.3% year on year to S$119.8 million.
However, the Haw Par held its final dividend steady at S$0.15, for a full-year dividend of S$0.30 for 2020, unchanged from the year before.
Its cash flow also remained strong, with S$97.9 million worth of dividends flowing in from its investments in United Overseas Bank Ltd (SGX: U11) and UOL Group Limited (SGX: U14).
HRNetGroup Ltd (SGX: CHZ)
HRNetGroup is a human resource firm that handles recruitment and talent acquisition.
The group has more than 900 consultants spread out over 13 Asian cities, and its services are delivered across 12 brands.
HRNetGroup’s share price has been hitting a 52-week high of S$0.67.
The group reported a slight 2.4% year on year increase in revenue for 2020 to S$433 million.
Net profit, however, tumbled 9.2% year on year to S$46.9 million.
Professional placements fell by 17.7% year on year to 7,022 as companies held back on hiring during the crisis.
However, the decline was offset by a 13.7% year on year jump in contract employees as businesses relied more on short-term hiring due to business uncertainty.
With economies slowly opening up as the vaccines are disseminated worldwide, HRNetGroup’s business should see a gradual but sustained recovery.
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Disclaimer: Royston Yang owns shares in DBS Group and Starbucks.
