3 Value Stocks to Buy Hitting 52-Week Highs

According to Barchart.com’s summary of stocks with new highs and lows, 119 companies hit 52-week highs and 262 hit 52-week lows in Tuesday's trading. 

That’s an interesting data point. 

While the S&P 500 and Nasdaq Composite indexes are up nearly 16% and 21% year-to-date, respectively, there are more 52-week lows than 52-week highs. 

Why is that? 

If I were to hazard a guess, it has something to do with the concentration of these two indexes by the Magnificent 7, etc. That’s not necessarily a bad thing if you’re holding an index fund. This small group of large-cap stocks has driven performance in recent years. I’m not sure when, or if, that will stop anytime soon.

Meanwhile, stocks hitting 52-week highs have some exceptionally high P/E ratios. For example, FTAI Aviation (FTAI), a momentum stock I recommended in April after hitting a 63rd 52-week high, has a P/E of 40.8, considerably higher than the S&P 500’s average of 23.6.

There are, however, some stocks hitting 52-week highs that have P/E’s well below the S&P 500 average. Here are three worth considering. 

McKesson

McKesson (MCK)hit its 58th 52-week high in 12 months Tuesday. Its shares are up nearly 47% in the past year. It has a trailing 12-month P/E of 21.8 and a forward P/E of 18.7.  

McKesson is best known as one of the world’s largest drug distributors. That said, it does more than distribute and retail pharmaceuticals. It also uses technology solutions to connect all stakeholders in the healthcare continuum and provides medical and surgical solutions to healthcare providers operating outside the hospital environment. 

The company reported Q4 2024 and full-year results in May. On the top line, its revenues grew 12% year-over-year to $308.95 billion. Meanwhile its adjusted earnings per share were $3.68 billion, flat to a year ago. Its EPS increased 6% due to fewer shares outstanding, to $27.44.   

The shares outstanding are lower because of its commitment to share repurchases. In fiscal 2024 (March year-end), it repurchased $3 billion of its stock. In 2025, it expects to buy back approximately $2.8 billion of the $6.6 billion left on its share repurchase authorization.  

Over the long haul, MCK stock has been and will continue to be a winner. 

Whitestone REIT

Whitestone REIT (WSR)hit its 41st 52-week high of the past 12 months Tuesday. Its shares are up 8% over the past year. It has a trailing 12-month P/E of 15.3 and a forward P/E of 13.0.

Whitestone acquires and operates retail centers in fast-growing markets such as Phoenix, Austin, Dallas-Fort Worth, Houston, and San Antonio. Its centers are community-oriented, so the list of tenants is often more diversified than that of the typical open-air mall. 

As of March 31, the REIT owned 50 properties with five million square feet of gross leasable area valued at $977 million net of accumulated depreciation. It also has five parcels of land for future development worth $22 million. 

It invests in what it terms Community Centered Properties. 

“Visibly located properties in established or developing culturally diverse neighborhoods in our target markets. We market, lease and manage our centers to match tenants with the shared needs of the surrounding neighborhood. Those needs may include specialty retail, grocery, restaurants and medical, educational and financial services.”

The REIT’s goal is to serve the local community within a five-mile radius of its properties.

Its last acquisition was Garden Oaks Shopping Center in Houston. In February, it paid $27.2 million for the 106,858-square-foot property, which was 95.8% leased at the time of acquisition. 

Whitestone pays a monthly dividend. For the first six months, it has paid $0.2439 a share in dividends. The annual rate of $0.4956 yields 3.8% at current prices. 

One of the REIT’s largest shareholders, MCB Real Estate, recently offered to take it private for $14 a share, a 17% premium to its 60-day weighted average share price. Whitestone rejected the offer as it did not represent fair value for its assets.

Get paid to wait for a better offer to come.  

Piper Sandler Companies  

Piper Sandler Companies (PIPR) hit its 37th 52-week high of the past 12 months Tuesday. Its shares are up 58% over the past year. It has a trailing 12-month P/E of 21.8 and a forward P/E of 17.3.  

Piper Sandler was created through the January 2020 merger of Piper Jaffray Companies with Sandler O’Neill + Partners.

“The merger brings together Sandler O'Neill's leadership in providing advice and solutions to clients in the financial services industry with the growing Piper Jaffrey Investment Banking platform,” stated the 2020 press release announcing the completed merger. 

The company generates revenue from two operating segments: Investment Banking (67% of revenue), institutional Brokerage (27%), and Interest and Investment Income (6%). 

In Q1 2024, it generated pre-tax income of $52.4 million, a pre-tax margin of 15.3%, 660 basis points higher than a year earlier, on $344.4 million in revenue. 

On June 6, it announced the acquisition of Aviditi Advisors, an investment bank focused on private equity and other alternative assets. Aviditi helps private equity firms raise capital for their funds. With 50 employees in North America and Europe, Aviditi has become Piper Sandler’s private capital advisory group. 

As private capital markets continue to grow in interest with institutional and retail investors, acquisitions like Aviditi make total sense. 

 

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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.