Riley Rosebee’s Popularity & Price blog posted its daily list of U.S. stocks hitting 52-week highs and lows Monday evening. There were 202 stocks hitting 52-week highs yesterday compared to just four lows.
Rosebee pointed out that the only index in positive territory was the Russell 2000, which represents 2,000 of America’s smallest public companies. He lists the names on the list by StockTwits followers -- he worked for Stocktwits between 2019 and 2021 and remains close with Howard Lindzon, its founder.
Lindzon said this about Rosebee’s stock tracking in November:
“In uptrending markets the least followed stocks with the highest relative strength are most interesting to me,” Lindzon wrote on his Howie Town blog.
“In downtrending markets, the most followed stocks with the weakest price relative strength are most interesting to me.”
At the moment, it’s safe to say the markets are in an uptrend. Based on Lindzon’s philosophy, here are three stocks to buy, hitting 52-week highs, with one large cap, one mid-cap, and one small cap.
Small Cap - National HealthCare Corp.
National HealthCare Corp. (NHC) provides senior care through 68 skilled nursing centers, 25 assisted living communities, a behavioral health hospital, five retirement communities, three behavioral health hospitals, 30 hospice agencies, and 35 home care agencies.
It's impossible not to read about the long-term care crisis in America. As CNN Business highlighted in September, one in six Americans are now 65 or older; most are retiring without knowing how to pay for long-term care.
“The do-it-yourself retirement that we have in place right now, where the cost of aging well falls all on the individual shoulders, is not working,” CNN Business reported the comments of Ramsey Alwin, president and CEO of the National Council on Aging, a non-profit advocacy organization. “Aging well should be a right, not a privilege based on factors out of your control like gender, race, ethnicity, income, and ZIP code."You’re probably wondering how NHC makes money, given the crisis on our hands.
It generates income in three ways: First, it provides physician and nursing care at its facilities across eight states. Secondly, according to its 2022 10-K, it provides “management services, accounting and financial services, as well as insurance services to third party operators of health care facilities.” Lastly, it owns 13 healthcare properties that it leases to third-party operators.
In the first nine months of 2023, its revenue was $840.6 million, 2.4% higher than a year earlier. Its income from operations was $37.0 million, 62.2% higher than in 2022.
The attraction of the business is that you have to be good to make any money because the margins are razor-thin. While that knife cuts both ways, it’s a barrier to entry. Plus, the care it provides isn’t going away.
Only one analyst covers NHC stock, which is probably why it only has 112 Stocktwits followers. It’s not on most people’s radar.
Mid Cap - Ryman Hospitality Properties
Ryman Hospitality Properties (RHP) is a company that I’ve followed ever since my wife went on a business trip to Nashville a few years ago. She and her colleagues went to the Grand Ole Opry, part of the Opry Entertainment Group (OEG), of which Ryman holds a controlling 70% stake.
While brands such as the Grand Ole Opry, Ryman Auditorium, and Austin City Limits have significant sway with music fans, it is the REIT’s hospitality segment -- it owns hotels and resorts in Nashville, Orlando, Dallas, San Antonio, Washington D.C., and Denver -- that generates 84% of its $528.5 million in revenue (Q3 2023) and 90% of its operating income.
The REIT’s ADR (average daily rate) in the third quarter was $239.0, 5.7% higher than Q3 2022. Its RevPAR (revenue per available room) was $165.58, 2.4% higher than a year ago, with an occupancy rate of 71.8%.
As for its entertainment segment, OEG is opening an Ole Red location in Las Vegas in early 2024. This will be the brand’s fifth and biggest at 27,000 square feet. With country singer Blake Shelton in the fold, there’s a real chance the brand goes national.
Up 26% year-to-date, its momentum will carry into 2024.
Large Cap - Broadridge Financial Solutions
The largest of three stocks with a market cap of $22.8 billion, Broadridge Financial Solutions (BR) tends to fly under the radar. It has just 644 Stocktwits followers, but if it continues to move higher -- it’s up 44% YTD and hit a 52-week and all-time high of $196.52 on Monday -- it won’t be much longer.
Broadridge competes with Thomson Reuters and others for the attention of investors and companies looking to reach investors. It describes itself as a “global fintech leader driving business transformation.”
I think the best way for an investor to understand everything it does is to scroll through the company’s news releases. It’s issuing a press release about its newest product or platform almost daily.
For example, on December 4, it announced that Sentry, its cloud-based solution for investment firms, was implemented for Carlyle Group’s (CG) private credit and collateralized loan obligation (CLO) portfolio management.
“Working closely with Carlyle, we customized Sentry to specically suit their portfolio management requirements, which emphasized the need to help manage all aspects of private credit and CLO administration,” said Mike Sleightholme, Broadridge's president of international and head of asset management solutions.
As Broadridge has developed products to help financial businesses digitize their back-end systems, its recurring revenues have become a more significant part of its overall revenue generation.
In early November, it reported Q1 2024 results, including an 8% increase in recurring revenues to $871 million. That was 60.9% of its overall revenue. At the same time, its adjusted operating income increased by 33% to 199 million, a 13.9% margin, 220 basis points higher than a year ago.
In 2024, it expects recurring revenue, excluding currency, to grow by 10.0% at the midpoint of its guidance, with an adjusted operating margin of approximately 20%.
Its business is boring but in the best way possible.
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.
