Is This Micro-Cap Stock Worth Picking Up at 52-Week Highs?

Kelso Technologies (TSX:KLS) is a British Columbia-based railway equipment supplier that buys and sells tank car service equipment. Shares of Kelso have soared 187% in 2019 as of late afternoon trading on May 14.

The stock is up over 130% from the prior year.

Shares hit a 52-week high of $1.79 in Monday trading. The company released its first-quarter results on the same day. It was a stellar quarter as Kelso reported revenues of $5.67 million compared to $2.51 million in the prior year. Net income jumped to $1.09 million compared to a net loss of $279,143 in Q1 2018.

Kelso’s turnaround is on track as we look ahead to the rest of 2019. It expects that an increase in capital spending will support its improved outlook for 2019 and 2020.

The company has benefited from an uptick in oil prices, and improved conditions in ethanol and chemicals markets. These broader trends are expected to result in higher production rates for tank cars into the next decade.

However, the potential for economic slowdown in North America remains a concern. Kelso stock had an RSI of 75 as of close on May 14. This puts shares well into technically overbought territory.

The company looks promising in early 2019, but value investors may want to await a more favourable entry point especially in a turbulent market.