Every Wednesday, I write about stocks making 52-week highs and lows. In recent weeks, it’s become an increasingly depressing situation, with the lows outnumbering the highs by a decent margin.
As I write this, with an hour left in the day’s trading, the NYSE and Nasdaq combined have 75 52-week highs and 109 52-week lows. At this point, the two exchanges are headed in different directions.
Of the 75 highs, 44 were from the NYSE, and 31 from the Nasdaq. Of the 109 lows, 26 were NYSE stocks, and 83 from Nasdaq.
Because the NYSE has more highs and much fewer lows, I’m going to select two stocks to consider for your portfolio from the exchange’s 44 highs and one from the Nasdaq’s 31 highs to consider for your portfolio.
Until the lows started outnumbering the highs, I never really thought about the implications. Still, if this continues to play out, we might be in for a significant correction over the summer.
Don’t they say, “Sell in May and go away?” This year, it could come true.
In the meantime, I’ll go against the grain and recommend a momentum stock or two that could keep moving higher.
Mueller Industries
Mueller Industries (MLI) is the first of two from the NYSE. On Wednesday, it hit a 52-week high of $59.59, its 46th of the last 12 months.
According to its website, Mueller is “the only vertically integrated manufacturer of copper tube and fittings, brass rod and forgings in North America.” Its products are used in HVAC (heating, ventilation, and air conditioning), industrial manufacturing, appliances, transportation, medical, military, and defence and electrical end markets.
It just so happens I recommended MLI stock on Barchart.com in December after the mid-cap hit a previous 52-week high. Its shares are up more than 25% year-to-date.
“Talk about a fortress-like balance sheet,” I wrote on Dec. 27.
“In the trailing 12 months ending Sept. 30, its revenues were $3.57 billion, with $835.2 million EBITDA and a 23.3% EBITDA margin.”
Honestly, it’s become one of my favorite companies. Its management seems very capable in all kinds of economic environments.
The company reported Q1 2024 results on Tuesday. Like the second half of 2023, the results would probably scare off many investors -- revenues declined 12.5%, and earnings per share fell 21.4% -- but it’s positioning itself to benefit when interest rates fall, and copper prices move back up as new home construction accelerates.
With $1.36 billion in cash on its balance sheet, no long-term debt, and operating lease liabilities of just $34 million, it has plenty to grow organically and through acquisitions.
Blue Owl Capital Corp.
Blue Owl Capital Corp. (OBDC) is the second of two from the NYSE. It hit a 52-week high of $15.85 on Wednesday, its 41st of the last 12 months.
Blue Owl is a BDC (business development company) that provides direct lending solutions to U.S. middle-market companies. If you’re an income investor, you might want to look closely at it.
The BDC is externally managed by Blue Owl Capital Credit Advisors LLC, part of the asset manager of Blue Owl Capital Inc.’s (OWL) credit platform, which has nearly $85 billion in assets under management.
While OBDC focuses on debt situations, it will also make equity investments alongside its loans to portfolio companies. It looks for businesses with EBITDA between $10 million and $250 million annually and revenues of $50 million to $2.5 billion. It has a $12.7 billion portfolio with loans and equity in 193 companies.
One key element of BDCs is that they must pay out at least 90% of their taxable income to shareholders. That’s why their 10.6% dividend yield is so high.
Eleven analysts cover its stock. Of those, nine rate it a Buy (4.27 out of 5).
It’s important to note that you’ll never make huge capital gains from OBDC. You’re buying it for income. However, if you put aside dry powder for future drawdowns, you can do well holding it over the long haul.
FTAI Aviation
FTAI Aviation (FTAI) is my one momentum stock from the Nasdaq. On Wednesday, it hit a 52-week high of $74.44, its 63rd of the last 12 months.
In August 2022, Fortress Transportation and Infrastructure Investors spun off FTAI Infrastructure (FIP) into its own independent, publicly traded company. In November 2022, the company became FTAI Aviation after Fortress Transportation and Infrastructure Investors merged with FTAI Finance Holdco.
FTAI Aviation owns and acquires aviation equipment for transporting goods and people globally. It also owns and leases
offshore energy equipment. As of December 31, 2023, it had total consolidated assets of $3.0 billion.
FTAI is externally managed by FIG LLC, an affiliate of Fortress Investment Group, a global investment manager with $48 billion in assets under management.
Softbank Group (SFTBY) , the massive Japanese investment firm, now owns Fortress. However, Mubadala Investment Company is in the process of buying 70% of Fortress from Softbank. Fortress management will buy the remaining 30%.
In 2023, FTAI generated $1.17 billion in revenue, 65% higher than a year earlier. Its net income from continuing operations was $243.8 million, up 320% from 2022.
The company pays a $0.30 quarterly dividend. The annual payment of $1.20 yields 1.6%. Its shares are up 62% in 2024 and 173% over the past year.
On the date of publication, Will Ashworth did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
