The 52-Week Highs Don't Lie

 | Aug 26, 2013 | 1:09 PM EDT
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You learn more from the 52-week high list for the stock market than from just about any other device, indicator or report. That's because new highs never lie. You don't get there through hype and hope.

Today is no different. Let's just tick down what has landed on this list, and you can see what I mean.

First, the new all-time highs: TJX (TJX), Cigna (CI) and Cabot Oil & Gas (COG).

TJX is the biggest winner in retail right now, courtesy of all of the losers out there, as TJX buys the close-out good of retailers that have faltered, and boy oh boy have the other sellers faltered. There are bloated inventories all over the place, and the fall apparel can't come in until the spring and summer merchandise goes to TJX. That's one of the reasons TJX had a good quarter last, and it is another reason the next quarter should be the single best number in retail.

Cigna is all about healthcare pricing and the investments it makes with your premium dollars. Both are going up. We know that despite President Obama's suggestions that healthcare costs are going down, Cigna has been able to get higher prices for its insurance. At the same time, it has big exposure to real estate with its investments, and after taking a beating for a very long time, those seem to be getting better and better.

Then there's Cabot Oil & Gas, which is by far the hottest natural gas company in the world. It has the best holdings in the Marcellus shale, mostly in Pennsylvania, and it keeps finding a lot more, making it one of the fastest-growing oil and gas companies out there. The company also has a ready market in New England, which is rapidly changing its heating fuel to cheap natural gas from expensive overseas oil. Cabot has been a perennial takeover candidate, and anything is a possibility, but this has been an earnings story, and it remains one.

Now for the 52-week highs. First is Halliburton (HAL). This is a tough one to figure, given the decline in drilling in this country, because natural gas prices have been so low. However, I think that drilling around the world is picking up, and people keep buzzing about a potential takeover from General Electric (GE), which is trying to beef up its oil and gas drilling exposure.

Next up, FedEx (FDX). Frankly, this one astounds me. The last thing we heard from this worldwide shipper was a brutal disappointment, not a terrific quarter as you would expect from a company that's hitting the 52-week-high list. But such is the power of a potential global turn in the economy that people want to play it with a company that has global reach. They are not dissuaded by the prevailing sentiment. This stock is about China and Europe turning. In fact, the whole run from the $80s, where it preannounced, to this remarkable height is all about an international turn, and while it might not be happening with the alacrity that the buyers who are chasing the stock might feel, it's a very for-real move.

Dollar General's (DG) ascent to the new-high list makes some sense if you think that the downward pull of a lack of income growth, higher taxes and higher gasoline prices is forcing the vast middle class to go under Wal-Mart (WMT) and Target (TGT) and go to Dollar General. All of the dollar stores, including Family Dollar (FDO) and Dollar Tree (DLTR), have been on fire, so it's not just the numbers from Dollar General, which is a favorite of mine. Now there's also the newfound chatter about a possible takeover in the space, something David Faber hinted at this morning on "Squawk on the Street." He mentioned that Dollar Tree or Dollar General might want to merge with Family Dollar, or that Wal-Mart might want to buy one of these companies, and that is probably what is behind this most recent action. Regardless, if things are as weak as seems to be the case after the near doubling in interest rates since the bottom, and if Washington is about to become another hotbed of gloom with partisan infighting, who would want to leave this group?

Chesapeake Energy (CHK) has been finding itself on the new-high list quite a bit lately, and I think that's because there's a realization that the assets Aubrey McClendon put together before he was fired aren't all that bad and in some cases are pretty darned good. If this stock were simply to play catch-up to the better names in the group, it could easily move up another 50% if -- and this is a big if -- natural gas takes a run at $4. The company could also be broken up or sold, no problem. 

Netflix (NFLX) seems to have taken up residence on the new-high list. It's one of several stocks that are loved and then bought that currently predominate in this market. There are way too many shorts in this stock, considering its momentum, and even though it has now tripled since I said that Microsoft (MSFT) or Apple (AAPL) should buy it, it remains a fantastic growth story that has harnessed the Internet better than any other company, save Facebook (FB) and Google (GOOG). Netflix is a cult stock that can be supported by the size of its market capitalization, vs. its 30 million odd subscribers, but there's no way it belongs on the list if we are simply talking about earnings per share.

It's fitting, of course, that its Internet compatriot Facebook is also on the new-high list. Facebook is a binary stock. There were bears who pressed the case every day ahead of the last quarter, saying that the company had no mobile strategy and was no longer hot when it comes to user engagement. Turns out both were untrue, and the stock has never looked back. As with Netflix, which people told you not to buy, Facebook has a level of fan support that the shorts misjudged. It's pretty simple: Like Facebook, like Facebook's stock.

Humana (HUM) has got a terrific healthcare franchise, and, like Cigna, it is a big winner under the Affordable Care act. These companies have been paying out less in claims but have been able to raise rates. Talk about nirvana.

Best Buy (BBY) doesn't quit here. Now some of the propellant comes from the 49% decline it underwent last year, second worst in the S&P 500. But at this point, the 200% rally falls right on the feet of the hard-goods renaissance, as individuals seem to have abandoned apparel for the tangibles, especially tangibles that make their homes more valuable. A home goes down in price if you do nothing to improve it. To make a home go up in value, you go to Best Buy.

Harley-Davidson (HOG) has somehow gotten on the list, and I think that Harley has gotten there for the same reason that Best Buy has been so hot. The consumer wants tangibles. The oddest thing here is that a Harley-Davidson is total discretionary purchase. You don't need to make it. That would seem to cut to bad sales, not good ones, but this economy gives hard goods a halo, and Harley-Davidson is the ultimate in hard goods. I would not have thought this stock would reach these levels, but then again, Harley is a status symbol a la two other hot stocks, Tiffany (TIF) and Michael Kors (KORS). You don't think of Gatsby riding a Harley, but the rally this stock is having has all the similarities to the other expensive hobbies that have become a continual theme in this market.

Finally, there's Tesla Motors (TSLA). What can I say? Gatsby meets Greenpeace. Performance meets safety. For $71,000, even the biggest geek can be cool. I keep thinking about the young whippersnapper who told me he wanted a job with me, and when I asked him for his best idea, he said, "Short Tesla." That was 80 points ago. I have offered him a job.

Eclectic list for certain, but that's good news for the bulls. You have some breadth in different industries. You have some consumer spending plays, some healthcare and a transport. That's called breadth, and this market has got great breadth, as judged by this list of the stellar performers at this moment in time in 2013.

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