After a dismal end to 2018, the first quarter of the year has led a renewed faith in the markets. Wall Street’s “fear gauge,” a measure of investor confidence, is at a six-month low.
This means that bullish sentiment is in full swing. Two stocks that have benefited significantly from the uptrend are Alimentation Couche-Tard (TSX:ATD.B) and CAE (TSX:CAE)(NYSE:CAE). Last week both stocks hit 52-week highs. Are the good times expected to continue? Let’s take a look.
Year to date, Alimentation Couche-Tard and CAE have returned a nearly identical 20.25% and 20.69%. This tops the healthy 15.06% return of the TSX Composite Index.
Over the short term, Couche-Tard may be due for a pullback. Its 14-day Relative Strength Index (RSI) is at 74.08, which indicates that the company has entered overbought territory. Despite potential short-term weakness, the long-term trend is still very bullish.
All 13 analysts covering the company rate it a buy or a strong buy. All of its moving average indicators also point to bullish momentum and a continued uptrend for the company.
CAE is in neutral territory. Its 14-day RSI of 66.19 indicates it is neither overbought nor oversold. Unlike Couche-Tard, CAE had entered overbought territory and quickly corrected.
Analyst are not as bullish on the company, with three rating it a buy and four a hold. Likewise, CAE’s moving averages indicators point to neutral momentum.
It is also worth noting that both companies are currently trading above analysts’ one-year estimates.
Top dividend-growth stocks
Couche-Tard and CAE have not only rewarded investors with capital appreciation. These are Canadian Dividend Aristocrats with strong histories of dividend growth.
Couche-Tard has a 10-year dividend-growth streak and a history of raising dividends by double digits. Its last increase came on March 28 and was a hefty 25% raise.
CAE has an 11-year dividend-growth streak. It has also averaged double-digit growth (14%) since its dividend streak began. The company last raised dividends by 11% and is expected to extend its streak to 12 years this coming September.
A word of caution, as both companies may have gotten ahead of themselves. Although the long-term prospects for both remain strong, they are trading above one-year estimates.
Couche-Tard is trading at a 29% premium to its one-year target price of $63.41, while CAE is trading 20% above its one-year target of $19.03.
As such, for those looking to take a position in either of these growth stocks, it is likely you will see a better entry point over the next couple of months. If the price dips, don’t miss out, as the long-term upward trends are still very much intact.
Have you heard about Amazon’s secretive “Project Vesta”?
Few people have… yet some of the greatest minds in the world believe this innovative technology could change the world.
Amazon doesn’t want anyone to know about this top-secret project, but there’s something even Amazon doesn’t know…
One grassroots Canadian company has already begun introducing this technology to the market – which is why legendary Canadian investor Iain Butler thinks they have a leg up on Amazon in this once-in-a-generation tech race.
But you’ll need to hurry if you want to pick up this TSX stock before its name is on everyone’s lips.
To learn more about this exciting technology and dark horse TSX stock before it’s too late, click here now.
It Might Be Time to Sell These 3 Overbought Stocks
1 Double-Digit EPS-Growth Stock That I’m Aggressively Buying for My TFSA
3 “Double-Threats” to Add to Your TFSA
3 Stocks to Beat the S&P/TSX Composite Index in 2019
Investors: Do You Own Canada’s Best Retail Stocks?
Fool contributor Mat Litalien has no position in any of the stocks mentioned. Couche-Tard is a recommendation of Stock Advisor Canada.