NO WAITING:
13 STOCKS HIT ALL-TIME HIGHS NOW
It’s a waiting game for investors to see if the bull market can stay alive by hitting a new high. But the wait is over for some investors in stocks already at never-before-seen heights.
There are 13 stocks in the Standard & Poor’s 500, including heart treatment maker Edwards Lifesciences (EW), robotic surgery equipment company Intuitive Surgical (ISRG) and restaurant McDonald’s (MCD), that are already trading at alltime highs, according to a USA TODAY analysis of data from S&P Global Market Intelligence. These are the stocks pulling off what investors hope the rest of the market can do, too. The S&P 500 itself is still down 3% away from its record high notched in May last year. Now 10% of the S&P 500 stocks are 1% or less away from new highs.
Seeing companies busting to all-time highs is encouraging for investors who hope the market’s strength can continue, says Bert Brenner, director of asset allocation strategy at People’s United Wealth Management. Stocks hitting new highs “signals a positive market assessment of future prospects and a willingness to buy those prospects,” he says.
Take the example of Edwards Lifesciences, which on Monday saw it jump to $105.08 — a new high — blowing past analysts’ average $99.78 18-month price target. Over the weekend the maker of heart valves showed data indicating one of its heart valves had superior results compared with surgery in some intermediate cases. Investors see a big opportunity for the company.
“We thought expectations were high going into the meeting, but the data were so much better,” says Joanne Wuensch at BMO Capital Markets. Seeing the stock soar to all-time highs lights a fire of excitement. “There’s a part of investor psychology that sees this that causes them to think, ‘I want to be part of this,’ ” says Wuensch, who boosted her price target on the stock to $114.
Intuitive Surgical setting an all-time high highlights how concerns about the stock and company late last year were overblown, says Brandon Henry, research analyst at RBC Capital Market. Shares of the stock are up 14% this year to $622.06 as in- vestors realize competition is further behind than feared. Although Medtronic (MDT) and Johnson & Johnson (JNJ), along with Alphabet (GOOGL), are working on robotic surgery systems, those won’t appear until 2018 or later, Henry says. “All the checks are coming out positive (at Intuitive), and that’s why the stock is working,” Henry says.
There are some points of con- cern with the types of stocks hitting highs, says Doug Sandler, stock analyst at RiverFront Investment Group. The fact that five of the 13 stocks at new highs are medical-related and many others are consumer staples companies like McDonald’s and General Mills doesn’t indicate a high level of confidence in the economy’s future growth. “These aren’t bull market stocks,” he says.