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TheStreet Open House

These Stocks Could Be Too Hot

Stocks in this article: WY BX

"In addition, its timberlands are the most productive and valuable among its peers because of its regional exposure in the Pacific Northwest and its wood products business (40% of sales) levers its more than the competition."

Any potential or current shareholders of WY love those reasons for ownership.

My caveat is that from both a fundamental perspective (shares selling at 23 times forward, one-year earnings) and from a technical viewpoint, WY may be due for a correction. As recently as Dec. 31, and admittedly connected with the "fiscal cliff" scare, shares traded near the $27 level.

It is also prudent to point out that WY shares are just as likely to test the 52-week high share price of $31.74. If the stock closes above that level it could conceivably form a new top before correcting. Those who care to invest at these levels may want to buy some "insurance" in the form of put options.


Another high-flyer is Blackstone Group (BX - Get Report), which since Nov. 16 has experienced a 48% skyrocket ride for its share price. BX is a diversified alternative asset management and financial advisory services company. Lately the spotlight has been on its real estate business.

It's been reported by several reputable news services that BX has accumulated an enviable portfolio of houses (three million, approximately) the company bought at distressed pricing and plans to use as rentals. In many areas of the nation there is a shortage of rental houses, and those are the regions BX has been targeting.

The best way to learn about Blackstone Group is to carefully peruse its informative Web site. You can easily find its full-year 2012 earnings report as well as its fourth quarter 2012 results. Personally speaking, I think this company is brilliantly led and operated.

What I want to show you, however, is the five-year chart of the stock's performance. The share price movement looks like a roller-coaster ride, yet its trailing 12-month cash from investing helps me understand why the stock hit a new 52-week high on Tuesday.

BX Chart BX data by YCharts

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