What a difference three weeks can make.
Three weeks ago, the NYSE had just five stocks hitting 52-week highs, compared to 167 on Tuesday. On April 16, just 13 Nasdaq stocks hit 52-week highs, compared to 104 on Tuesday.
That’s a huge turnaround.
As I write this early Wednesday, 12 NYSE stocks have already hit 52-week highs. Here are three worth considering.
PubMatic
With a name like PubMatic (PUBM), you’d half expect it to be related to the brewing industry. Alas, the company’s integrated technology platform brings together buyers and sellers of digital advertising.
It generates revenue through fees charged to publishers based on a percentage of the value of the advertising impressions that publishers monetize on the Pubmatic platform.
Other revenue generators include OpenWrap, a header bidding solution, Connect, which provides additional data and insights to buyers, Activate, which allows buyers to execute direct deals on our platform across publisher inventory, and Convert, PubMatic’s commerce media solution. The company launched the last two in 2023.
I would be lying if I said I knew everything about PubMatic’s business, which is far from it.
However, its November 2023 presentation claim that " all advertising will become digital, and all digital advertising will become programmatic” is spot on—maybe not in 2024 or 2025, but somewhere down the road.
PubMatic’s platform can help make this a reality.
Pubmatic stock hit its 27th 52-week high of the past year this morning, trading at $25.36, nearly 50% higher in 2024 and 90% over the past year. Its momentum looks ready to carry on.
On Tuesday, Pubmatic reported Q1 2024 results that included a 20.4% revenue increase to $66.7 million and non-GAAP earnings per share of $0.03, six cents higher than Wall Street’s expected three-cent loss.
“Customers and partners like Instacart, Klarna, Roblox and GroupM are choosing to build their ad businesses on PubMatic technology. We've spent 17 years building differentiated solutions and we believe our competitive moat is widening while our logo list continues to grow,” CEO Rajeev Goel stated in its Q1 2024 press release.
Pubmatic finished the first quarter with $174 million in cash and no debt on its balance sheet.
In Q2, it expects $70 million in revenue and a 500-basis-point increase in its gross margin to 61.9%. That should result in another non-GAAP profit. For the entire year, it’s calling for $300 million in revenue at the midpoint of its guidance, 12% higher than in 2023.
It trades at 4x its expected sales in 2023. Trade Desk (TTD), which helps ad buyers manage programmatic ad campaigns and has a 40x larger market capitalization, trades at 23x sales.
International Flavors & Fragrances
It’s been a long time since I’ve written about International Flavors & Fragrances (IFF). Here’s what its 10-K says about its business.
“We are a leading creator and manufacturer of food, beverage, health & biosciences, scent and pharma solutions and complementary adjacent products, including cosmetic active and natural health ingredients, which are used in a wide variety of consumer products,” its 2023 10-K states.
“Our products are sold principally to manufacturers of dairy, meat, beverages, snacks, savory, sweet, baked goods and other foods, personal care products, soaps and detergents, cleaning products, perfumes and cosmetics, dietary supplements, food protection, infant and elderly nutrition, functional food, pharmaceutical and oral care products.”
So, if you were looking to invent the next great energy drink, you’d go to them to devise a formula for your billion-dollar idea. Multiply that by thousands of times yearly, and you get $11.5 billion in 2023 revenue.
As stocks go, IFF has woefully underperformed the S&P 500 over the past five years. While the index is up more than 80%, IFF has lost nearly 29% of its value. That said, it hit its third 52-week high of the past year on Wednesday ($97.19), pushing its 2024 return to nearly 20%.
Its shares are testing 52-week highs after the company delivered decent Q1 2024 results on Monday, including a 5% increase in sales and an 80% increase in adjusted EPS to $0.63.
However, of the 17 analysts covering its stock, only six rate it a Buy (3.53 out of 5.0) with a target price of $86.12, well below where it’s currently trading.
It’s easy to see why analysts are skeptical. Over the past two fiscal years, it has taken nearly $5 billion in non-cash impairment of goodwill charges. Its net debt as of Q1 2024 was $10.3 billion, or 42% of its market cap.
IFF is working to reduce its debt and improve margins. In Q1 2024, it increased its adjusted operating margin by 330 basis points to 19.9%, higher than in the past five years. At the same time, it reduced its net debt by $1.1 billion, or 10%, in 2023.
The risk involved in betting on IFF suggests options might be a wise way to bet on the company’s stock.
The Jan. 17/2025 $130 call looks promising. With an ask of $1.95, you’re looking at a down payment of just 1.5% and 254 days to hit paydirt.
International Seaways
International Seaways (INSW) has an easily understood business model. It gets paid to ship crude oil and chemicals worldwide using its fleet of 81 tankers and other vessels.
Spun off from Overseas Shipholding Group (OSG) in 2016, its market cap is about 8x larger than that of OSG'sits former parent. OSG shareholders received 0.3333 shares of INSW for every share held in the parent.
The six analysts covering its stock rate it a Stong Buy (5 out of 5) with a $64 target price. That's higher than where it’s currently trading.
International Seaways stock hit $60.38 on Wednesday, its 31st 52-week high of the past year. Not surprisingly, its shares are up 30% in 2024 and 61% over the past year. Its shares didn’t do much between 2016 and the beginning of 2022, but they’ve been generally uphill ever since.
Its Q1 2024 results were down slightly from a year ago, but nothing to lose sleep over.
“We continue to share in this upcycle with our shareholders by declaring a combined dividend of $1.75 per share, which is 60% of our adjusted net income in the first quarter of 2024. Amidst a period of continued market strength, we are also pleased to have taken advantage of compelling opportunities to renew our fleet and strengthen our balance sheet under the new credit facility,” CEO Lois Zabrocky stated in the press release.
In 2024, according to S&P Global Intelligence, it’s expected to generate $700 million in adjusted EBITDA from $1.03 billion in revenue, a very healthy 68.1% margin, the highest in the past decade. It’s trading at about 6x its 2024 EPS estimate of $10.11.
While times change in the shipping business, its business is very healthy.
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.
