Looking at some of the 52-week highs from a week in the market is often indicative of its direction.
Last week Echostar (NASDAQ: DISH) was moving over $52. Its 52-week low is $33.55. The high signals a couple of critical points. The first is that strategic M&A is far from dead. There were a number of rumors and analyst reports that said AT&T (NYSE: T) would be a buyer of the satellite TV company to allow the telco to more effectively compete with cable in the television market. The other reason Echostar has been moving up is that it has been able to add HDTV channels at a more rapid rate than cable because it does not have the bandwidth constraints that cable does. Satellite TV was viewed as dying just a year ago. HDTV demand has changed that. And, while private equity buying may be moribund, a critical technology and customer base is still attractive to another corporate buyer.
Coca-Cola (NYSE: KO) hit a 52-week high last week at $59.75, and it hit it Friday and the market collapsed. But, when investors get nervous, a big global company with a strong balance sheet becomes a haven. Coke has more than a billion in cash and little debt. Its earnings were good. And, perhaps most important, it has a worldwide customer base for inexpensive products. Not the kind of things people will cut out in a tight economy.
China Mobile (NYSE: CHL) hit a 52-week high at just over $100. That's certainly a demonstration that the market still has a robust appetite for China stocks. The company's shares are up from a 52-week low of just below $38. Even with a correction at the end of the week, the world's largest cellular company had a market cap of $362 billion. Wall Street may regret driving Chinese shares up so sharply, but that has not happened yet. And, China Mobile still has a potential total customer base of close to one billion people old enough to use a phone. It only has about a third of that market now.
Hewlett-Packard (NYSE: HPQ) hit a 52-week high of $53. IDC research numbers showed that the company took more global PC share in Q3 and that its sales are rising quickly. As long as there's no sharp fall in tech spending for computers at enterprises and with consumers, HP's business is likely to stay strong into next year. Intel's (NASDAQ: INTC) big earnings win told the market that orders for PC chips were strong and were likely to stay that way into next quarter, a positive for HP.
Douglas A. McIntyre is an editor at 247wallst.com.
See also: Market signals from 52-week lows
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