3 High-Octane Growth Stocks Ready to Hit New 52-Week Highs

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  • These three growth stocks near 52-week highs have the potential to keep running higher.
  • T-Mobile (NYSE:TMUS): The telecom became the largest prepaid carrier last year.
  • Universal (NYSE:UVV): The world’s largest leaf tobacco exporter and importer is on a rocket ship ride.
  • American Express (NYSE:AXP): It is a leading player in the credit services industry.
growth stocks near 52-week highs - 3 High-Octane Growth Stocks Ready to Hit New 52-Week Highs

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The three best-performing sectors last year were communication services, information technology and consumer discretionary. Although the growth of artificial intelligence (AI) stocks grabbed all the headlines and many companies came near 52-week highs because of their relation to the technology, a business didn’t need to be plugged into AI to win.

There are plenty of growth stocks near 52-week highs that had little to do with AI, machine learning, or large language models. They got ahead because of good business fundamentals like growing sales, expanding profits and meeting consumers or business needs.

Below are three growth stocks at or near high points for the year that are still worth buying. Don’t make the mistake of taking profits off the table. That could cut into your portfolio’s long-term returns. Too often investors hang onto falling stocks hoping for a rebound while cutting the knees out from under their best performers. Let these winners run and they will repay you with even bigger gains down the road.

T-Mobile (TMUS)

tmobile (TMUS) logo on an office building facade
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Wireless giant T-Mobile (NYSE:TMUS) kicked off the new year by hitting a new all-time high of $163 per share on the first day of trading. The telecom became the largest prepaid carrier last year when it finished the third quarter with 21.6 million compared to Verizon’s (NYSE:VZ) 21.4 million. It also leads its rival in postpaid customers with 96.3 million to 92.7 million customers, respectively.

The ongoing 5G network rollout promises to be the biggest growth driver for carriers and T-Mobile already exceeds the efforts of Verizon and AT&T (NYSE:T) by covering some 330 million people. Where T-Mobile’s 5G covers 98% of the country, Verizon covers about 15%. But AT&T’s coverage is mostly low-band 5G, which gets about the same speeds as LTE. Similarly, Verizon offers ultra-wideband that is very fast but has limited range.

T-Mobile is not only growing in the wireless market, but also expanded into additional addressable markets, including home broadband, enterprise and government. It has an opportunity to disrupt these markets with its 5G network while capturing significant market share and revenue. T-Mobile has 4.2 million broadband customers and has a longer-term goal of reaching between 7 million and 8 million customers. It also wants to keep picking up market share in the enterprise and government markets over the next few years.

Analysts see T-Mobile growing earnings by a whopping 67% annually. It means with the stock going for 16 times estimates and a fraction of that growth rate, the Un-carrier is a bargain with plenty of room for even greater gains.

Universal (UVV)

packs of cigarettes in convenience store rack
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Cigarette smoking may be in a secular decline but that doesn’t mean Universal (NYSE:UVV) won’t keep growing. The world’s largest leaf tobacco exporter and importer is on a rocket ship ride since reporting fiscal second-quarter earnings in early November. The stock is up 47% in just two months hitting a new high though still below the all-time record achieved in 2017.

That’s because Universal counts as customers all of the world’s leading tobacco companies, including Philip Morris International (NYSE:PM), Altria (NYSE:MO) and British American Tobacco (NYSE:BTI). It also counts the world’s largest cigarette manufacturer, China Tobacco International, as a customer.

Universal enjoys significant pricing power as inventories remain tight and demand for all types of tobacco is high. Segment operating profit surged 55% year-over-year. Despite domestic industry policies, tobacco remains in high demand because not all countries are cracking down on smoking. Even in those that are, the move to reduced-risk products like vaping and pouches still entails using tobacco leaf.

The tobacco stock trades at extremely discounted levels despite hitting a new 52-week high. It goes for 5 times earnings and free cash flow, and the dividend yields 4.7% annually. Not only is Universal still a cheap stock, but it can still smoke the averages with greater growth going forward.

American Express (AXP)

an American Express (AXP) credit card sticking out of someone's pocket
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Despite being a stodgy stock, American Express (NYSE:AXP) ripped higher similar to Universal’s surge. The stock was up 27% in the last year mostly on the gains made in the last 60 days.

American Express, of course, is one of the best-known credit card issuers. It is a leading player in the credit services industry with an 11% share of the U.S. market based on purchase volume. Yet people spent more using its cards than at most other financial institutions. Only JPMorgan Chase (NYSE:JPM) customers spent more on cards issued by it.

That could be because American Express targets wealthier individuals for its credit card. It’s a more select group that owns an American Express card. Visa (NYSE:V) and Mastercard (NYSE:MA) branded cards are much more widely distributed. The company also has a loyal customer base bonded to its strong brand reputation. Higher net worth individuals also tend to be more resilient during an economic downturn. That gives American Express a competitive edge should the economy go sour. It’s why Warren Buffett said, “You can’t create another American Express.”

The stock trades at a reasonable 15 times earnings. That makes American Express a solid choice for additional gains as profits forecast to grow 15% annually for the next five years. It could even approach its record highs from a few years past.

On the date of publication, Rich Duprey held a LONG position in T and MO stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Rich Duprey has written about stocks and investing for the past 20 years. His articles have appeared on Nasdaq.com, The Motley Fool, and Yahoo! Finance, and he has been referenced by U.S. and international publications, including MarketWatch, Financial Times, Forbes, Fast Company, USA Today, Milwaukee Journal Sentinel, Cheddar News, The Boston Globe, L’Express, and numerous other news outlets.


Article printed from InvestorPlace Media, https://investorplace.com/2024/01/3-high-octane-growth-stocks-ready-to-hit-new-52-week-highs/.

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