My 52-week high screen highlights some winning sectors

The UK market has rebounded since President Trump’s ‘Liberation Day’ unleashed US tariffs on the world. But many shares remain well below the levels seen in February and March.

Against this backdrop, I thought it might be interesting to revisit my 52-week high screen. I last covered this momentum-driven screen in November 2024. I was curious to see if there are any companies or sectors that are still showing strong momentum at the moment despite the uncertain outlook.

To recap briefly, this screen looks for profitable businesses enjoying positive momentum with a share price that’s within 10% of its 52-week high. Here’s a snapshot of the current rules:

You can see my 52-week high screen here.

Stocks making 52-week highs

I was not sure how many stocks I’d find in the screen results, or whether they’d fit any particular pattern. In the event, I found 21 stocks qualifying for the screen as of market close on 17 April 25:

While there’s some diversity, I think there are also some clear themes here for investors looking for sectors with strong momentum.

Gold

No surprise, really. Gold has now been on a 10-year bull run and is trading at record highs:

Silver is also enjoying similar momentum. This is one of the strongest sector themes in these 52-week high results, in my view. Companies listed above that are benefiting from the strong gold price include:

Ramsdens Holdings (LON:RFX) - we took a positive view on recent results from this Super Stock in the Daily Report, where I also discussed the company’s heavy exposure to gold (far more so than at peer H & T (LON:HAT)).

Plus500 (LON:PLUS) and IG group (LON:IGG)  - I imagine there is plenty of activity in leveraged trading of gold and silver futures on these CFD platforms. These businesses aren’t immune from cyclical pressures and carry some regulatory risk. But we’re generally positive on both companies in the daily report, most recently here (IG) and here (PLUS).

In fairness, strong momentum at IG and Plus500 is about far more than just gold. Market volatility over the last six months or more has provided a much broader tailwind for these firms, encouraging clients to trade more actively.

Fresnillo (LON:FRES) - the gold and silver miner reported a 25% rise in annual profits in 2024, despite a modest 3.4% increase in gold production.

Hochschild Mining (LON:HOC) - adjusted pre-tax profit rose by 272% in 2024, aided by a 32% increase in gold production to 245 koz.

Griffin Mining (LON:GFM) - shares in this AIM-listed miner, which operates in China, have doubled over the last two years.

The group’s 2024 results have not yet been published, but management has already reported a fourth-quarter shortfall in production. This was due to a fatal incident that shut down production at Caijiaying from 11 October until the end of 2024.

Production has now returned to normal and broker forecasts suggest a much stronger result for 2025, potentially resuming previous momentum.

My view: to judge from recent comments among Stockopedia subscribers, UK investors are divided over whether the current gold price is a) still too cheap or b) much too high.

I have no idea which view will prove correct, although I’d observe that previous gold bull markets have lasted around 10 years.

If gold does remain at current levels for any length of time, I suspect we could see further earnings upgrades for company’s with beneficial exposure to the gold price.

On the other hand, if gold weakens, the current level of momentum being enjoyed by miners, in particular, could prove very fragile. After all, a commodity producer’s share price is essentially just a leveraged play on the price of the underlying commodity.

Defensives choices

The next sector I think is worth highlighting is consumer defensive stocks. Affordable treats such as soft drinks tend to remain popular even when consumer spending is under pressure. I think there’s some evidence of this here, along with good execution from some market-leading businesses.

Coca Cola HBC AG (LON:CCH) - this is one of the bottling companies for Coca-Cola Co (NYQ:KO). It sells all the Coke brands (including Costa Coffee) in markets including parts of central and Eastern Europe, parts of Western Europe, Nigeria and Egypt.

February’s full-year results were at the top end of expectations and the shares have performed well since then. Excluding some geopolitical concerns, I see this as a high-quality defensive that could be a good long-term performer.

Stocko currently styles this as a High Flyer and I wouldn’t argue with that.

Although I think the current valuation is probably justified by strong quality and momentum, CCH shares aren’t obviously cheap.

Marks and Spencer (LON:MKS) - the well-managed turnaround at this high street stalwart continues, with results buoyed by the continued growth of the M&S Food business.

Food and drink from M&S certainly falls into the affordable treat category I mentioned earlier. It’s an upgrade from regular supermarket options, but far cheaper than eating out.

The group’s Christmas trading results showed an 8.9% rise in like-for-like food sales and reported the biggest ever week for online sales in its Clothing, Home & Beauty division.

While the valuation no longer looks obviously cheap, a string of broker upgrades over the last 18 months suggests the stock’s High Flyer status could be well deserved:

A G Barr (LON:BAG) - this soft drinks group owns brands including IRN-Bru and Boost and is another long-term favourite of ours at the Daily Report. Recent FY25 results showed a 16% rise in adjusted pre-tax profit, driven by higher sales and improved margins.

Graham highlighted some possible niggles in his recent coverage of the results. But I agree that this remains a high quality business that does not seem unreasonably expensive.

Broker earnings estimates have also trended positively over the last year or so:

Telecom Plus (LON:TEP) - utility stocks can be good defensive picks, but as a reseller Telecom Plus has the added attraction of not needing to fund the vast investment required to upgrade the UK’s electricity networks.

The multi-level marketing model at the heart of the group’s Utility Warehouse business is unusual and unconventional. But TEP has a 20-year track record of delivering successfully and profitably:

A long-term energy supply deal allows the company to offer competitive pricing to customers and recent growth has been strong. Customer numbers topped 1m last year and annualised customer growth is currently running at 13%.

Premier Foods (LON:PFD) - the owner of brands such as The Spice Tailor, Mr Kipling, Sharwoods and Ambrosia leaves Premier well positioned to benefit from demand for affordable treats. The group has enjoyed a successful turnaround since the pandemic. This has allowed it to reduce debt to a more comfortable level and reintroduce dividends.

As a High Flyer, my main niggle with this business is that ultimately its profitability is fairly average:

I suspect this limitation could put a cap on Premier’s valuation over time. But I wouldn’t rule out further progress. Full-year results in May should provide a fresh update on the outlook for the year ahead.

My view: the Consumer Defensives sector has the highest average StockRank across the UK market at the moment:

A sector average P/E of 14.6 and dividend yield of 3.6% don’t seem especially expensive to me. I think there could still be opportunities in this part of the market.

Investment Trusts

3i (LON:III) - this private equity business has effectively become a play on the success of its largest investment, European discount retailer Action. I don’t follow the story but I am instinctively wary about investing in an asset manager trading at 1.8 times its book value.

This is a situation where I’d want to do more in-depth research before taking a strong view.

Care REIT (LON:CRT) - this REIT specialises in care homes and recently recommended a cash takeover offer at 108p from a much larger US REIT. This offer was slightly below last-reported book value of 119p per share, but it didn’t look too unfair to me given Care REIT’s size and debt burden.

PRS Reit (LON:PRSR) - this build-to-rent specialist has now virtually completed its build-out and says its portfolio of homes is performing well.

However, this is another discounted REIT that has put itself up for sale, as part of a strategic review. Last week’s third-quarter update reported “discussions with a number of parties regarding the acquisition of the Company”.

The shares are trading 20% below December 2024 NAV, so could still offer some value. Personally, I’d prefer a slightly larger margin of safety given the relatively low dividend yield.

Target Healthcare Reit (LON:THRL) - shares in this care home specialist have performed strongly since peer Care REIT received a takeover offer. Target’s shares are now trading at a relatively small discount to book value compared to many REITs.

While the 6% yield looks relatively safe to me, I’m inclined to think the valuation is relatively fair at this level. However, I do see Target Healthcare as a slightly stronger standalone proposition than Care REIT.

Marwyn Value Investors (LON:MVI) - I’m not familiar with this investment trust, which describes itself as a buy and build operator, providing “private-equity style investing in public and private markets”.

However, a high dividend yield and a big discount to book value suggests this might be worth a closer look, for investors willing to drill down into the underlying investments:

Aew UK Reit (LON:AEWU): this small-cap commercial property REIT has been a surprisingly strong performer. It seems to have a strong following among private investors and has delivered a reliable high dividend yield since its flotation in 2015.

The forward yield stands at 7.8%, which remains attractive in my view. But share price gains over the last six months mean the shares are now within 10% of their December ‘24 book value of 110p per share.

It’s not clear to me how much value is left, especially given the cautious outlook:

My view: the investment trust sector has offered some terrific value over the last year, in my opinion. Perhaps especially in REITs. Some of these big discounts are starting to close, others still persist.

If interest rates fall, then I’d expect a rising tide to lift (nearly) all the ships. But if rates stay elevated for longer, I think we could see a more nuanced range of performance, depending on companies’ debt leverage, portfolio quality and scale.

On balance, I think there are still some opportunities in UK REITs.

The best of the rest: growth stars?

I’ll wrap up this overview by highlighting three stocks from these screening results that don’t fit into any of the themes above. Instead, they just look like good quality growth stocks to me.

XPS Pensions (LON:XPS): this pension consultancy has impressed us since its 2017 IPO.

Strong quality metrics and a positive trend of earnings upgrades suggest there could still be more to come, despite a more demanding valuation.

Graham maintained our AMBER/GREEN view in his recent update.

Games Workshop (LON:GAW) - I am not sure I need to say much about this war-gaming miniatures business. Games Workshop shares have risen by over 2,700% over the last decade, making it one of the London market’s greatest success stories.

Licensing deals including a tie-up with Amazon offer the prospect of further growth at near-100% margins. Megan covered the group’s latest update in March.

Cohort (LON:CHRT) - I thought that defence might be one of the themes for this review. But small-cap Cohort is the only UK-listed defence stock that makes it past my 52-week high screening rules.

The outlook for this group of seven businesses continues to look strong:

However, the 2025E P/E is now 27 and the stock’s ValueRank has fallen very low, even for a High Flyer:

Mark took a data-led look at the performance of stocks with low factor ranks in an article last week. His findings suggest investors may want to take a nuanced view on High Flyers with very low value scores.

As I discussed recently in my BAE Stock Pitch, I think it’s also important for investors to form their own view on the risks and opportunities currently facing the UK defence sector.

Conclusions

It’s good to see some genuine growth stocks in this set of screening results, even if they are in a minority alongside more thematic selections.

Perhaps this outcome is a reflection of where the market is at the moment – momentum is stalling for many companies that may individually be strong, but are exposed to external uncertainties beyond their control.

These screening articles are always intended to provide ideas to consider for further research, not a list of stocks to buy. I certainly think these results highlight some opportunities that might be worth a closer look, alongside others where I might be more cautious.

As always, let me know what you think in the comments. Do my theme suggestions stack up? Are there other areas where thematic opportunities exist?

Disclosure: Roland owned shares of IG Group Holdings at the time of publication.